Top 10 Reasons for Business Valuation 10. The proper allocation of a business purchase price to personal, real, and intangible property can result in tax benefits. An independent business valuator must provide a stock valuation when an ESOP is formed, and every year thereafter. Fairness opinions are also commonly called for in mergers and acquisitions, and in determining controlling interests. Valuation is often needed when a company seeks financing or renegotiates an existing finance obligation.
Valuation is a key element in strategic and market analysis.
Market analysis helps a business focus its marketing resources. Decisions regarding future business goals such as expansion and spin-offs can be made more easily with the help of strategic forecasting. Family wealth is often shared through such means as business transfers, inheritance, family limited partnerships, and gifts of closely held stock. Valuation can help minimize tax liability and reduce the possibility of an IRS audit or a legal dispute. Valuation is often needed when divorces involve family-run businesses.