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).
The method depends on what your business does.
Active businesses (Consulting, Trades, Tech)
A multiple of your annual profit (e.g., 3x to 5x Earnings)
Holding Companies, Real Estate Corps, or businesses losing money
Assets minus Liabilities (What would be left if you sold everything today?)
Retail or businesses with clear industry benchmarks (e.g., Dental Practices, Pharmacies)
Based on recent sales of similar businesses in the area
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."
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.
To get an accurate (and lower) valuation, you must provide full disclosure:
Last 3-5 years (Notice to Reader or Audited).
Last 3-5 years.
Showing share structure and shareholder agreements.
List of personal expenses run through the business (cars, travel) so the valuator can 'normalize' the earnings.
(The Draft)
Lower ($3,000 - $6,000)
Based on provided numbers with limited investigation.
Good for mediation and settlement talks.
(The Evidence)
Higher ($15,000+)
The Valuator audits the numbers, interviews management, and researches the industry.
Required for Trial. Harder to attack in court.
Learn how to prevent double-counting business income in both asset division and support calculations.
Understand how courts determine true income when business owners minimize reported earnings.
Master the critical financial disclosure form that determines your property division outcome.
A bad valuation can bankrupt your business. We work with top-tier valuators to ensure you don't pay a penny more than necessary.
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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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