There are different ways to structure a business.
If you’ve been involved in the business, you’re likely to know the difference between them. But if it’s your ex-partner’s business, you might not know how the business has been set up.
Here’s a quick overview:
Sole trader – the owner controls the business assets, but they’re also personally liable for any business debts. The income and profitability are the most important figures. Although business assets – for example, premises or vehicles – might also be taken into account.
Partnership – this might be an informal partnership, with no written agreement, or a formal one. If other people – apart from you and/or your ex-partner – are involved, then valuing it will be more complicated and you’re more likely to need expert help.
Limited company – as with partnerships, valuing a limited company will be more complicated if other people have a stake in the business. If you and/or your ex-partner own all the shares, it might be relatively straightforward to value.