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VIC Property Settlement - Determining the Value of a Business?

Discussion in 'Family Law Forum' started by Catherine Tanner, 29 May 2015.

  1. Catherine Tanner

    29 May 2015
    Likes Received:
    My husband owns a 50% share in a Real Estate Agents office which is operating successfully and has done so for over 6 years now. He is telling me that the business is worth next to nothing because it carries debts which are secured by the rent roll. However, if he were to sell it, the value of his share the business would be around $500K.

    There is also a sales department which earns approximately $110K per month, office commission. However, he plans not to sell but continue to operate and draw his annual $180K salary package plus sales commission (I have no way of knowing what this figure is, since it is held in an account in the business name and he draws down and pays tax on it when he needs it).

    My question is - does it matter what the debts against the business are or is the assessment based on the value of the asset?

    Funds are tight for me, so I will struggle with big legal bills. Any advice would help enormously.
  2. Tracy B

    Tracy B Well-Known Member

    24 December 2014
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    Hi Catherine Tanner,

    I realise your question was asked a while ago. How did you go with your property division? Which valuation method did you end up going with?

    As for my two cents, it really depends on how you decide to value a business. It can be done in many different ways. I would suggest valuing by "sale or share" value, however, this is just one of many available methods. Even this method depends on a number of factors and the "sale price" of a business can be determined in any different ways (e.g. revenue, profits, tangible assets, intangible assets, going concern and reputation, social media..) It really is worth getting a professional to determine the price. Unfortunately, the valuation method will likely ultimately be determined by negotiations or court.

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