When your marriage is on the rocks, the value of the company or a stock of shares can play an important role in the distribution of assets. This is certainly the case if one is married in community of property, but sometimes also if there are prenuptial agreements. Often there is a set-off clause and the profits saved by the company must be divided among themselves. In these cases, the value of the company must be accurately determined.


If the parties cannot agree on the value of the shares, the court can appoint a judicial expert to determine the value. However, the description in the judgment of what must be calculated is essential. The judiciary often follows the fiscal definition of economic value without knowing the difference between economic value and price.



Business case of divorce



Man and woman together own the shares in a machine factory. The man works in the company and the lady is not. In addition to the man, there are another 10 employees. The company had in recent years a turnover of € 1 million and a profit after tax of € 10,000 per year. The man had awarded himself a salary of € 175,000 per year. The husband and wife decide to get a divorce. In the divorce proceedings that follow, the value of the 25% interest that the wife holds in the company is the subject of dispute.






The judge states that the fair value of the shares must be determined on the reference date. The man's lawyer argues that the economic value on the reference date of the 25% interest is nil. He calculates the value based on the profitability value method and sets a return requirement of 25%, which gives him a value of € 40,000 for the total share package. The value of 25% would then amount to € 10,000, but the lawyer argues that a 25% interest in such a small-scale company cannot be sold because the man with his 75% has full control and does not wish to part with it.

The woman's lawyer engages a registry valuator and it rates the stock by economic value. It comes to a value of € 500,000. In his principles, the valuator has normalized the man's salary to a level that he believes is reasonable as an employment remuneration for a director of a company of such nature and size. In addition, he argues that economic value cannot be the correct starting point, because due to the fact that the woman has to transfer the shares to the man upon divorce, she misses a certain flow of money that comes from the company and that this lost flow of money is the only basis can be for the valuation and not the price as it will apply in the market (= economic transactions). (Source: PE Tijdsschrift voor Bedrijfsvolging, Chris Denneboom RV)



Wilt u meer weten over onze diensten?
Neem gerust contact op.