
There are many reasons for a privately owned business to have a business valuation. At some points they are required by another party – like the Internal Revenue Service. At other times it is for the benefit of the business owner or owners
- As a tool for planning a business acquisition or sale
- As a tool for long term planning, including exit strategy planning
- To comply with an Operating Agreement or a Buy-Sell Agreement to complete an internal ownership transfer
- When offering stock options as compensation for employees, a privately held business is required to have a valuation to comply with Section 409a of the Internal Revenue Code at least every 12 months or with every new funding round
- To value the business interest of a deceased taxpayer on the estate tax return