A business valuation has many applications, including serving as support for various financial and estate planning initiatives to strategic decision making.
Very often, formal business valuations (also referred to as appraisals) are used as supporting IRS documentation when someone transfers or gifts assets to another party.
They are also useful and often needed in the context of partnership or shareholder agreements, updating incentive stock programs and sale/succession planning, among other applications.
They are many flavors of valuations, so it is critical to understand the basis and approach of the appraisal to ensure it is useful for the intended planning objective.
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