If you and your spouse share ownership of a retail business, you will have to determine the value of your enterprise during your divorce. The valuation process helps assign a proper value to your and your spouse’s share of the business. As you valuate your company, be sure that you do not overlook any intangible assets your business owns.
Tangible assets include the products that you sell to customers. However, while tangible assets take a physical form, intangible assets do not.
Examples of intangible assets
The Motley Fool explains there are many kinds of intangible assets that a retail company could have. You may have intellectual property like a product design, a business logo or a piece of audio-video media. Legal protection such as copyrights, trademarks or patents can protect your right to profit from your intellectual property. Your domain name is also important since it directs customers to your business website.
Your company may also have a customer list which gives you names of people you can contact to offer new products. If your business has a good reputation with the public, your company may have strong goodwill. In the event you have a big enough operation, you might franchise your company to various locations.
Why intangible assets are valuable
Many intangible assets have value because you can quickly convert them to cash, usually by selling them off or using them to create tangible assets. For instance, a licensing agreement can generate different products based on your intellectual property. Intangible assets like your company’s goodwill may also boost the value of the products your business offers to the public.
Because intangible assets are not something you can touch, it is easy to lose track of them or not understand you have them in the first place. You may need to go through your financial and legal documents to ensure you own all of the copyrights, trademarks, patents, and digital media that you can derive value from. In the event you have to sell your business in your divorce, you should know how much your ownership share is truly worth.
