If you are selling a business, the buyer may want to pay part of the price through an earnout provision. This is a contractual arrangement in which the seller receives additional payment in the future if certain financial goals are met. In other words, part of the price is contingent on the performance of the…
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Consider Tax Issues When Valuing a Business for Divorce
Let’s say divorcing spouses own part of the stock in a closely held corporation. This may be one of their biggest marital assets, and often one spouse decides to buy out the other party’s shares by transferring some assets in exchange for the stock. Before jumping headfirst into these transfers, it’s important to consider the…
Using Business Value as a Benchmark
The ultimate indicator of how well a company and its management are performing is how much the company is worth. Any performance measurement or benchmarking system should include fair market value as one of its primary metrics. With public companies, it’s easy to monitor this metric by tracking share prices and market capitalizations on public stock…