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The What and Why - Business Valuation

Most people I talk to know or have a sense of what is business valuation, but in many cases are less clear or knowledgeable about why or when you may need a business valuation.

Business valuation according to Wikipedia

Business valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or receive to effect a sale of a business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes such as in shareholders deadlock, divorce litigation and estate contest.

In short, business valuations are needed when certain triggering events take place, such as a business sale, a shareholder dispute, a divorce or for tax purposes and estate planning. If you have any question pertaining to value or planning a triggering event please give us a call or visit our website or call us (250) 929-2929

The first consultation is always FREE.

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