Business valuation of SMEs – legally compliant and defensible

Business valuation is considered more of an art than a science, and opinions can be divided about art – just as they can about valuations. So how can a company valuation be prepared in a way that is as legally secure and defensible as possible? Which methods are recommended for the valuation of SMEs and how can these be implemented in practice? These and other questions are answered in the following article.

Introduction

Basically, a company valuation is impossible, as the valuation concerns the future and this is uncertain. Around 100 years ago, the term “valuation theory” was used rather than “valuation theory”. However, this uncertainty inherent in valuations should not lead to carelessness. Especially when valuations are legally required – whether for reasons of tax, inheritance or property law – the results are not readily accepted by the parties. More often than was the case years ago, these are also subject to judicial review. As expert opinions cannot be “recalled” without further ado, care should be taken when drafting them to ensure that the valuation is legally sound and defensible. This article provides advice on this. Based on the special features of legally required valuations, it also discusses the selection of the appropriate method and its proper application.

Read the full article from TREX Der Treuhandexperte 3/2023 here.