Guest Blog: Day in the Life of a Chartered Business ValuatorSubmitted by Agrawal Associates on December 4th, 2017
Dec. 4, 2017
Owning a business comes with a plethora of benefits. Flexibility, prestige, opportunity, to name a few. However, it’s not without its challenges. Many business owners find themselves awash in cash and tax issues at one period of time or another.
That’s where Chartered Business Valuator’s (CBV) come in. Mike Shackleton has been designated as a CBV since 2004 and since that time has been exposed to a wide variety of scenarios. For our latest guest blog, we’ve asked Mike to share some situations and how they were resolved.
My first assignment was a shareholder dispute. Three brothers were working together in a family business and one of them was dipping into the cash. My assignment was to look into what was taken, attempt to quantify the result and prepare a report on the value of the company before and after the money was taken. It was an interesting assignment as I thought I was engaged in a big fraud investigation. In the end, it turned out that the brother who retained me simply wanted take some cash himself and needed to know what the appropriate equalization payment would be.
Since then I’ve worked with other shareholder disputes such as soon-to-be-ex-spouses going through a divorce and wanting to know what the business was worth for the settlement agreement. I’ve attended mediation sessions trying to help out with settlements and determining what was fair to each party. Sometimes business owners contact me as they want to sell their business and would like to know what it’s realistically worth and how they can structure the deal to minimize the tax on the sale. Often I’m contacted by someone looking to buy a business because they want an independent evaluation of what they are hoping to buy.
Recently, I was asked to prepare a report on what an incorporated professional’s actual income was. He was a dentist and he needed an accurate picture of what his income was. He was in the midst of a divorce and he needed the income determination to arrive at a support number for his ex-wife. His income flowed out from his professional corporation and was subject to various timing differences between his corporate year-end and the calendar year-end which he reported his personal income. We had to reconcile these amounts to arrive at a clear picture of what his income was.
One of the longer files I ever worked on was a dispute between a group of lawyers who were in a partnership together. Like the proverbial shoemaker’s son, they did not have a partnership agreement as they felt that, as professionals, they would be able arrive at an equitable settlement should any one of them want to leave or retire. That worked great until one of them decided to leave and take his practice with him, a practice that one of the remaining lawyers had, for the most part, groomed him to take over expecting that things would work out. Needless to say, things did not and hence, I was retained.
In my experience, every file for a Chartered Business Valuator is unique and requires a personalized approach to arrive at an equitable solution.
You can learn more about Mike Shackleton and his experience at quadrantaccounting.ca.
Views of guest speakers may not be shared by Investors Group.