subject: What Business Valuation Services Are Available Through a Business Appraiser? [print this page] What Business Valuation Services Are Available Through a Business Appraiser?
If you need business valuation services, it's important hire a business appraiser that offers business valuation as a core practice, with appraisers that specialize in a variety of business valuations usually being the best choice, as more than one type of valuation often becomes necessary within the same business matter. Below, we list four types of business valuation services that are highly sought after in today's business world.
1. Valuations for Estate Planning
Business valuation services for estate planning apply to estates that feature the transfer of a business from one party to another. By achieving accurate valuation of a business, the business's owner can then take measures to protect its transfer from estate taxes, such as through the formation of a family limited partnership. In addition to valuating an estate, a business appraiser may also make estate planning suggestions.
2. Shareholder Transaction Valuations
The most common precipitants of shareholder transaction valuations are: when a company attempts a buyout of minority shareholders via a squeeze out merger, or when it attempts the same buyout through a reverse stock split. In such cases, shareholders often contest the buyout price by requesting share valuation, which in turn prompts the company effecting the buyout to request valuation.
3. Employee Stock Option Valuations
When a company offers its employees stock options, the stock should be promptly evaluated for two reasons: to account for employee compensation expense, and to prevent tax penalties on employees that receive stock as a compensation option. There are four variables for stock option valuations: the option's exercise price; the underlying stock's price on the date of its valuation; the length of time until the option expires; and the underlying stock's price volatility.
4. Valuation for Business Bankruptcy
Corporate bankruptcy and personal bankruptcy share some basic characteristics, such as the need for asset valuation in the event assets are liquidated to satisfy outstanding debt. A business appraiser specializing in bankruptcy valuation ensures that a business's assets are properly valuated to achieve the highest proceeds from liquidation, and that a transfer of assets isn't judged fraudulent due to improperly assessed asset value.
