Business and divorceJean-Claude Desnoyers
A divorce, like any cause of dispute, is a difficult situation to experience. When one or both spouses are owners in a business, the process may need more time and attention. This is also why most of the mandates of a Chartered Business Valuator (CBV) are in family law. Determining the available income of a business owner or self-employed worker for support payment purposes requires additional expertise. A Chartered Business Valuator can help you during several steps of the process. Here are 3 areas for which you might need my help. Do not hesitate to call me, it will be a pleasure to assist you.
1. Business valuation
A Chartered Business Valuator can determine the fair market value (FMV) of the business on the date of separation, the date of marriage and a current date. The valuation can only be provided at the date of marriage if one or both spouses owned shares at that date. To proceed with a valuation at a current date, it usually requires that both spouses be owners of the business. The value is necessary in most cases when preparing the balance sheet for the net family property statement at the separation and date of marriage.
2. Available income of a shareholder or a self-employed worker
The remuneration received by a shareholder or a self-employed worker is not the same as a third party receiving a T4. Their revenue is not necessarily representative of the available income for support payment purposes. Several factors can influence the amount. This is the reason why the help of a Chartered Business Valuator can be required. An expert can help you in situations such as:
- The company in which the spouse is a shareholder shows a profit;
- Fluctuations in revenues/bonuses paid to shareholders
- Suspicion that the company pays personal expenses;
- Suspicion that the business has some unrecorded cash sales;
- The business does income splitting with related parties;
- The spouse has income from a real estate property, capital gains, dividends, etc .;
- The spouse is the beneficiary of a trust;
3. Other mandates of the Chartered Business Valuator
A Chartered Business Valuator can calculate the fair market value of the business and the available income to spouses of shareholders or self-employed workers. He/She can help you in other litigation situation, such as:
- Help you understand complex organizational structures;
- Advise you in the preparation for the examination of a witness or expert, in our field of expertise;
- Advise you in the preparation for a settlement conference, in our field of expertise;
- Advise you in the preparation for the negotiation of an agreement, in our field of expertise;
- Provide testimony as an expert witness in Court;
- Assist you in the preparation of the balance sheet for the net family property statement at the date of marriage and separation;
- Value assets and contingent disposition costs related to a business.