Phoenix Division of Business Assets Attorneys Deliver Sound Guidance
Experienced Arizona lawyers protect owners’ rights in dissolutions
When business partners hit a fork in the road, each must look to the future while protecting their interests. At the Law Offices of Donald W. Hudspeth P.C. in Phoenix, our business law attorneys help stakeholders in small businesses protect their rights whenever circumstances compel owners to go their separate ways. These situations can involve the sale or dissolution of a company, the buyout of a significant contributor or a settlement and succession plan after a key player’s death. In such matters, each stakeholder should have separate counsel to protect their rights to company assets, including branding, community goodwill, intellectual property, contracts, real estate, equipment and inventory. The process can be complicated, so you should only trust your interests to an experienced business divorce lawyer.
Knowledgeable firm assists clients with the proper valuation of business assets
A necessary starting point for a business divorce is to understand how much the business is worth. There are various methods experts use to determine overall value, such as:
- Fair market value — This assessment attempts to gauge how much someone would be willing to pay to buy the company. To determine this amount, we can review bona fide offers and data on sales of similar companies to make a reliable comparison.
- Capitalization of earnings — Under this process, experts assess a company’s future profitability based on its cash flow, annual return on investment and expected value. This method works for stable, established companies whose revenues don’t fluctuate wildly year to year, but is not recommended for startups poised for exponential growth.
- Excess earnings method — Experts use this approach to divide a company’s earnings into separate streams for tangible assets and intangible assets. Developed by the U.S. Treasury in 1920, the process is popular for its simplicity, but has been criticized as unreliable. Nevertheless, it is often appropriate for professional practices and small businesses where a premium is placed on customer goodwill.
- Book value method — This is a snapshot approach, which simply subtracts liabilities from assets to determine whether a company is in the black and by how much. It’s important to understand that this method discounts intangible assets, such as brand strength and customer goodwill, and is not appropriate for companies that have expended resources in the development of new products that haven’t reached their market potential.
- Liquidation method — How much would you accumulate if you sold off the business assets? This method is appropriate when a company has invested heavily in real estate, equipment or patents which have inherent value.
Depending on the specific circumstances, parties often use different methods in negotiations to highlight arguments in their favor. As your advocate, we explore various approaches to valuation in order to help you emerge with an appropriate share of business assets.
Experienced lawyers work to resolve business divorces favorably for clients
Ownership rights depend greatly on the partnership agreement or the articles of incorporation. These documents should detail each party’s rights in the event of sale, dissolution or buyout. However, questions often arise about the quality of a fellow owner’s performance or the value of their participation, and whether more or less than the agreed upon proportion of assets would be fair under the circumstances. Moreover, the cost of a buyout can often strain company resources to the breaking point. Our attorneys zealously protect our clients’ rights, and we are adept at finding creative solutions for even the most complex situations.
Contact our Phoenix law firm for representation during a business divorce
Law Offices of Donald W. Hudspeth P.C. in Phoenix provides reliable, effective representation for stakeholders in the distribution of company assets. To schedule a consultation with an experienced business divorce attorney, call our office today at 866-696-2033 or contact us online. Located in midtown Phoenix, our office is easily accessed by light rail or car, with plenty of available parking.