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Is A Business Part Of The Property Pool In Family Law Proceedings?
Do you have a business and are wondering what this means for you in your property settlement? Keep reading to discover how the value or share of the value of the business is included in these proceedings and what you should know moving forward.
What is considered in a property settlement?
When considering property settlement all assets and liabilities owned jointly or in each parties sole name are included in the asset pool.
What does this mean for a business owned by one party?
This means that even if a business is owned by only one party on their own or with other people, the value of the business or their share of the value of the business would be included alongside the bank accounts, super, houses and cars.
How is the value of the business determined?
The value of the business can be considered and agreed based upon the value of the assets including plant and equipment, funds in the bank and goodwill and any liabilities the business may have. A businesses value could also be just the goodwill value even if there are no physical assets.
What if the value of the business is not agreed by the parties?
Parties often agree the value based upon their knowledge of the business and by looking at the financial statements prepared by the businesses Accountants but if there is a disagreement about the value a Registered Business Valuer will be appointed with the parties sharing the costs of the Valuation. They do this jointly and agree that they will accept the Valuation which is provided. It is though possible to ask questions of the Valuer once the Report is released in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
How is this Valuation of the business used in the proceedings?
If the matter is in Court the Valuation would be filed with the Court with an Affidavit and if the matter got to a Final Hearing the Valuer could be called to give evidence about their Report to assist the Court with determining what value will be used. Otherwise it would be used for negotiation purposes whilst exchanging offers or at a Mediation.
If you have any further questions regarding your own property settlement matter, please contact us to speak to a Solicitor and receive advice for your personal situation.
If you have any further questions regarding your own property settlement matter, please contact us to speak to a Solicitor and receive advice for your personal situation.
Genuine Legal Family Lawyers & Mediators
Australasian Legal Information Institute (AustLII), a joint facility of UTS and UNSW Faculties of Law.
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