Types of Business Valuations & Appraisal in Nassau County, New York City, Suffolk County NY And Surrounding Areas
Business owners, CFO’s, investors, shareholders, CPA’s, attorneys, fiduciaries and others need business valuations for many reasons. Below are some of the purposes for which NBVG members prepare business valuations.
Selling a Business
Sellers of businesses usually want to know the fair market value of the business before entering into a transaction. Sellers often want to know the most probable selling price before going to market.
Partnership or Shareholder Agreements
Agreements between partners or shareholders, often a buy-sell agreement, should be based on a business appraisal rather than some simple formula. Often, an appraisal is performed when a shareholder, such as a professional, is buying into a business or professional practice or when they want to sell out and move on.
Marital Dissolution (Divorce)
During a divorce, a closely held business is usually a significant marital asset. Often, an appraisal is done by an appraiser hired by each spouse however, in some cases, one appraiser is retained by both parties to prepare an objective value acceptable to both parties. Each appraisal should be totally objective regardless of which side has retained the appraiser—however, in practice this is often not the case.
Estate Planning for Gifts or Inheritance
Interests in closely held businesses can be transferred during the lifetime of the owners to minimize the estate taxes that will be due on the death of the owners. Business appraisals are typically required and must be filed with the Internal Revenue Service along with the gift or estate tax returns. Often, these reports are closely scrutinized by the Internal Revenue Service. For this reason, it is important to retain a highly qualified and experienced business appraiser to prepare the needed valuation.
Family Limited Partnerships or Limited Liability Companies
These entities are often used as estate planning devices for owners of closely held businesses including farms and ranches. Minority interests in the company or farm can be gifted to relatives or others while the owners still maintain control of the company or farm. Typically, discounts apply to the minority interests that are gifted thus saving gift and/or estate taxes. Your attorney can help you structure the entity that is appropriate for your situation. We can do the business valuation needed to quantify the appropriate discounts.
Acquisitions and Mergers
Employee Benefit Plans
Litigation Issues involving Lost Profits or Economic Damages
These types of cases need a business appraisal to establish the amount of damages that occurred. Often, the business must be valued twice. Once, at the present time and the other as if the action that resulted in the problem had never taken place. The difference represents the amount of damages.