If you own a business, whether in Miami, South Florida or beyond, getting an appraisal of the worth of your company can bring many advantages. However, the costs associated with conducting a business appraisal can be prohibitive. These costs can put business owners off, but as any business broker worth their salt will tell you, not carrying out such an appraisal is a mistake. What follows is a list of important reasons why you should consider conducting a business appraisal in Miami even if you have no plans of selling your business any time soon.
Table of Contents
1. Transferring Shares to Unincorporated Parties
In the United States, business owners are legally permitted to gift shares up to an exclusion amount of $14,000 to an unincorporated party such as a child or relative before being subject to federal gift taxation. A business appraisal at the time of transfer can help you know the value of your shares and whether your gifts comply with IRS requirements.
2. Securing Investment
Attracting new investment for your business usually proves impossible if you cannot supply potential investors with a comprehensive breakdown of how much your business is worth. While different metrics can be used to calculate the value of a business, using an accredited, third-party business appraisal is recommended.
3. Donating to Charity
An advantage of giving to charity may be that your business receives certain tax deductions for your generosity. In order to qualify for tax deductions, you first have to provide the IRS with an accurate and up-to-date valuation of your business. The best way to do this is by carrying out a business appraisal.
4. For Divorce Proceedings
On top of the emotional stress that can accompany divorce, the legal proceedings involved could have important financial implications. In many US states, your partner is entitled to 50 percent of your total value as part of any divorce settlement. The worth of your business interests will be factored into these proceedings, which means that a business appraisal will need to be carried out.
5. Legal Settlements
If an insurance company refuses to cover the costs of legal proceedings in a business dispute, assets may need to be sold off to finance the debt. A business appraisal will need to be conducted in order to fairly value and sell these assets.
6. Selling the Business
In the event that a business owner decides to sell up, coming up with an asking price that maximizes sale potential is essential. The best way to learn how much you can realistically ask for your business without putting off potential buyers is to hire an unbiased third-party business appraisal firm.
7. Planning for Death
As a co-owner in a privately-held business, you should always ensure that there is an agreement in place that details what is to be done if you pass away. Typically, this is covered in a buy-sell agreement. However, a business appraisal needs to be conducted to break down what the business and its assets are worth before any buy-sell agreement can be drafted.
8. For Informational Purposes
Even if you are not actively looking to sell your business, or your business is not the subject of a legal dispute, learning how much your company is worth is valuable. An accurate valuation and a clear vision of your assets and liabilities will help guide your business plan for the coming financial year.
Although a proper business appraisal may be costly, the reasons you should get one carried out are manifold. At A. Neumann & Associates, LLC, we are one of the most experienced and reputable Miami Dade appraisal firms currently operating in South Florida. Contact us today and have our business appraisal professionals aid you in the process of finding out how much your business is worth.
About Carson Derrow
