Ownership conflicts can arise among the owners of any legal business entity, including corporations, limited liability companies, partnerships, and other legal entities. They come in one of two varieties:
1. Dissenting Shareholder Actions - This form of disagreement emerges when minority shareholders believe they are not obtaining the full value of a transaction to which they are entitled. They file a lawsuit to demand proper compensation for their stake in the company, expressing their dissatisfaction with the unfair treatment.
2. Oppression Actions – This form of conflict is the most similar to a business divorce. The aggrieved shareholder (usually a noncontrolling stakeholder) seeks the company's dissolution to end the oppressive actions of the controlling shareholder.
Not to be missed: My children are not interested in taking over the family company! So, what's next?
Fair value (or "fair cash value" or "value" in some jurisdictions) is the criterion of value for business valuation Utah or appraisals originating from ownership disputes in most state jurisdictions. The notion of fair value, on the other hand, varies by jurisdiction. When considering the shares of any dissenter, "fair value" means the share's value immediately before the corporate action to which the dissenter objects, excluding any appreciation or depreciation occurring in anticipation of the action.
In addition, a similar definition has been adopted in certain states, albeit without the term "unless exclusion would be inequitable."
The type of dispute determines the date of valuation. For example, the valuation date for dissenting shareholder disputes is not the day of the shareholder meeting where the shareholder objected to a transaction. Rather, it is as of the day before the meeting of shareholders. The valuation date in oppression cases is usually when the complaint was filed with the court.
Transaction Preparation (i.e., capital raising)
What should an investor expect to pay for a share of your company? It all relies on the company's value. A Business Appraisal Phoenix is required to set a price for an investor to acquire your firm.