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Corporate valuation

Your Business is Your Biggest Asset. Don't Let Them Overvalue It.

Valuing a private corporation in a divorce is not as simple as looking at the bank balance. Learn how we use Chartered Business Valuators (CBVs) to determine 'Fair Market Value' while deducting the necessary taxes.

Legal Review: This corporate guide was reviewed by Deepa Tailor, Senior Family Lawyer, to ensure compliance with the principles of Fair Market Value and Notional Disposition costs (2026).

Too Busy to Read? The 30-Second Answer

The Concept: You do not just split the bank account. You must value the shares of the corporation.
The Method: We hire a Chartered Business Valuator (CBV) to determine the value using Earnings (EBITDA), Assets, or Market comparables.
The Deduction: Crucially, we deduct "Distributive Taxes" (the tax you would pay if you sold the business or pulled the money out). You only share the After-Tax value.
The Protection: This prevents you from paying your ex 50 cents on the dollar when you only actually own 75 cents on the dollar after taxes.

How Will Your Business Be Valued?

The method depends on what your business does.

Earnings-Based (EBITDA)

Best For

Active businesses (Consulting, Trades, Tech)

The Math

A multiple of your annual profit (e.g., 3x to 5x Earnings)

Asset-Based (Liquidation)

Best For

Holding Companies, Real Estate Corps, or businesses losing money

The Math

Assets minus Liabilities (What would be left if you sold everything today?)

Market-Based

Best For

Retail or businesses with clear industry benchmarks (e.g., Dental Practices, Pharmacies)

The Math

Based on recent sales of similar businesses in the area

The Minority Shareholder Debate

The Discount

The Business Owner argues:

"I only own 30% of the company. I have no control. My shares are worth less because nobody wants to buy a minority stake."

Value to Owner

The Court often says:

"We are not selling the company. We are valuing it in your hands."

In Family Law, Minority Discounts are often rejected unless there is a genuine restriction on selling the shares.

What Your Valuator Needs

To get an accurate (and lower) valuation, you must provide full disclosure:

Financial Statements

Last 3-5 years (Notice to Reader or Audited).

Corporate Tax Returns (T2)

Last 3-5 years.

Minute Book

Showing share structure and shareholder agreements.

Discretionary Expenses

List of personal expenses run through the business (cars, travel) so the valuator can 'normalize' the earnings.

Calculation vs. Comprehensive Report

Calculation Report

(The Draft)

Cost

Lower ($3,000 - $6,000)

Detail

Based on provided numbers with limited investigation.

Use

Good for mediation and settlement talks.

Comprehensive Report

(The Evidence)

Cost

Higher ($15,000+)

Detail

The Valuator audits the numbers, interviews management, and researches the industry.

Use

Required for Trial. Harder to attack in court.

Common Questions About Corporate Divorce

Related Resources

Double Dipping: The Boston Rule

Learn how to prevent double-counting business income in both asset division and support calculations.

Imputing Income: When Tax Returns Lie

Understand how courts determine true income when business owners minimize reported earnings.

Financial Statement (Form 13.1): The Math of Divorce

Master the critical financial disclosure form that determines your property division outcome.

Protect Your Life's Work.

A bad valuation can bankrupt your business. We work with top-tier valuators to ensure you don't pay a penny more than necessary.

Book Your Corporate Strategy Session
Deepa Tailor

Deepa Tailor, Senior Family Lawyer

Deepa Tailor is the founder of Tailor Law. She specializes in corporate divorce strategy, helping business owners navigate valuation, tax minimization, and asset preservation.

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