Short video by Bob Gauvreau explaining that formal business valuations are important in shareholder disputes, partner buyouts, and intergenerational transfers. He notes that partnership or shareholders' agreements often require valuations at specific events (exit, death, identified dates) and that valuations are typically required or highly recommended when owners buy out or are bought out.
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Business valuations comes in handy is when we have some sort of shareholder dispute, partner buyout or an intergenerational transfer. And a lot of instances as a business owner, if you've got partners or multiple shareholders, you've got an established agreement. And inside that agreement, it either is a partnership agreement or a shareholders agreement. There's typically timing components that say at this particular time, maybe when one owner is deciding to exit, or if there's a death with one of the shareholders or if we're identified at a certain date, a lot of times there's a requirement in there to have a formalized business valuation completed. Looking at any sort of partnership, shareholder disputes, buyout, in those cases where it's inter management, one person's getting bought out or another person is buying another person out, typically required, definitely highly recommended. And then also on any sort of intergenerational transfer from one, we want to establish that value. Again.