Back view of businessman with umbrella looking at city

  • Understanding the valuation of the business is critical to the owners of closely held business in planning and management.

  • Closely held business owners typically have most of their personal wealth tied up in their company, but rarely know the current value of the enterprise. 

  • Current valuation data is important for strategic planning, dispute avoidance, insurance purchases and tax compliance.

Business Valuation for Closely Held Business Owners

Understanding the value of your business is critical to the management and operation of a business, to protecting the value of the business, and to planning for the future. Many owners see valuation as an issue that you need to look at at certain stages in the life of the business—wwhen someone dies or gets divorced, when it’s sold, or when there’s a tax issue.

That value, however, doesn’t consider other, crucial reasons why valuation is necessary for the business owner. The reasons are both defensive and offensive. For example, you cannot know how much insurance you need for your business if you’re just guessing about what it’s worth. You need this information for the defensive purpose of protecting your investment.

Tools that You can Use

How much is your business worth today? 
You can get an immediate estimate of a range of values here.

We counsel clients on the valuation issues in their business.  Contact me with with questions.

Offensively, business valuation is a strategic tool that offers insight, guides decisions, and uncovers opportunities for growth.

Business owners, on average, have about 80 percent of their personal assets tied up in their businesses. But only 30 percent of the owners of closely held businesses have a clear picture of what the business is worth. Continue reading

  • BusinessBridge is a ‘fractional’ general counsel program designed to address the needs of closely held business owners for an ongoing, strategic relationship with an experienced attorney.

  • An outside general counsel (OGC) levels the playing field with larger competitors with access to in-house attorneys. 

  • The ongoing relationship with an attorney enables closely held business owners to focus on growing their business, securing their personal lives and preserving their legacy without assuming unnecessary risk.


Small and medium enterprises have unique issues and exposure, often with little room for error. The owners of these closely held businesses need advice and supportfor the unique challenges and opportunities they face.

BusinessBridge, outside general counsel, is a client offering designed specifically to cater to the requirements of SMEs, providing strategic legal guidance and support through all stages of your business lifecycle.

Understanding Your Business

Our program begins with an understanding of your business, industry, and objectives by the lawyers who take individual responsibility for the engagement. We proactively approach our services to tailor them to the specific needs and goals of your enterprise and its owners. This strategic partnership is calculated to drive your business forward.

I consult with every BusinessBridge client to get a clear picture of their needs and opportunities, both business and personal.  I want to visit the business when possible and meet others involved.  Are there multiple owners? What are the challenges facing their market?  Who are the stakeholders in their business?  Where do their families fit into the picture, now and in the future?  The Exit Planning Institute defines these as the three legs of the stool supporting the owner: business, personal, and financial.

From that meeting, we formulate a plan to protect and grow the business and to assure that the personal details unique to the closely held business owner are being addressed.  This can include issues like reworking corporate governance documents, protecting intangible assets, labor and employment issues, as well as personal estate planning and business continuity plans.  I am able to call on the experience of the breadth of practice areas at the Weiner Law Group to put together a strategic plan.

Ways to Get Started: Useful Client Tools

How Much is My Business Worth

Business Stability Checkup

Contact me if you would like to discuss BusinessBridge and whether an outside general counsel is right for your needs.

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  • The fiduciary duties of loyalty and care may be different when a partnership is involved, rather than a corporation.

  • The duties that shareholders in a corporation owe to each other are different than those owed in a partnership.  Shareholders have more discretion to consider their own interests first. 

  • Understanding the duties owed by those in a business is important to avoid liability to business partners

This fight between accountants in practice together demonstrates the different ways that courts will look at corporations on the one hand and partnerships, an entity that the what the law calls an unincorporated business association.  Limitied liability companies are also unincorporated business assocations.

The case is also another lesson in the course: Bad Things Happen to People Who Don’t Bother with Contracts When They Start a Business with Others.


Fiduciary Duties Owed Between Partners

The takeaway from this case is that the duties that shareholders owe to each other are different from the duties that partners and LLC members owe to each other. That is not to say that there are no duties between shareholders in a closely held corporation, but those duties are not presumedto exist.  They have to be proven from the circumstances.  We will discuss some of the differences as we go through the details of the case.

Why does this matter?  Because understanding the duties owed by those in a business is important to understanding the rights and liabilities of those involved, Those who have fiduciary obligations are personally liable when they ignore these duties.  And those who are owed the fiduciary duty have a right to hold the fiduciaries responsible.

Accounting Partnership Dissolves

This dispute between the accountants turned into a lawsuit. The combatants were involved in Forward LLP, a poorly documented accounting partnership. Kristina Edwards and Sean Forman were locked out of the business, but they went to court and got temporary restraining orders (TROs) by the trial court.

These allowed them to get back to using  Forward software, email, Google Drive, and client files and communications at the outset of the case. The defendants appealed that decision and lost.

The case we are looking at is from the California Court of Appeals, Edwards v. Forward, but the legal principles here will apply in most states, including New York and New Jersey, where I practice. Continue reading

  • Agreements that limit former employees from soliciting customers or disclosing confidential information are critical to protecting the value of a closely held business.

  • Restrictive covenants and non-compete agreements are difficult to enforce and must be carefully drafted to assure that they are enforceable. 

  • Closely held businesses should rely more heavily on contracts to prohibit solicitation and disclosures.

Restrictive covenants such as non-compete and non-solicitation agreements are vital to the stability of a closely-held  business. Let’s examine how these agreements can be used to protect the value in the most important drivers of value, the intangible assets in your businesses.


Female entrepreneur in casualwear sitting at wooden table and signing contract after successful completion of negotiations with business partner, close-up shot

Intangible assets are things like intellectual property, customer relationships, and proprietary information. Businesses can prevent employees or rivals from misappropriating these assets by implementing  effective restrictive covenants.

Securing these intangible assets is essential in the business world for preserving a competitive edge, achieving long-term success, and increasing a company’s worth.

Contact me to answer your questions about restrictive covenants and how they should be used in your closely held business.

Are Restrictive covenants Becoming Unenforceable?

The restrictive covenant, however, is under attack from a number of sources. They may be difficult to enforce and in some states unlawful. Continue reading

  • Intangible Capital are the elements that define a company’s real earnings capacity and its value.

  • The Exit Planning Institute recognizes four intangile capitals in a business: human capital, structural capital, customer capital and social capital.

  • Intangible capital is closely tied to the intangible assets of a business, which commonly represents 80 percent of the value of a business.

We talk a great deal about how the most important assets of your business are those that can’t be seen or touched. I want to discuss something that exIt planners refer to as intangible capital. Intangible capital groups your intangibles into four classes that a business owner can identify, strengthen, and, in the process, grow their companies and make it more valuable.

Understanding Intangible Assets and Their Effect on Value

The most important and valuable assets of almost every business are the intangibles. They’re something that you can’t find on a balance sheet, but something that you need to understand, protect, and cultivate.

And they are critical to the business owner who is seeking to maximize the value of the business and who is planning an exit strategy.

Tangible assets are things like machinery, real estate, inventory, intangible assets, or things like intellectual property, patents, trademarks, copyright, brand recognition, customer relationships, goodwill, unique processes, and other kinds of proprietary technology. Continue reading

It’s a decision involving a law firm partnership that, if widely followed, will likely have a sweeping effect on the interpretation of the statutory requirement for unanimity in adopting critical agreements that govern partnerships and liited liability companies.Lerner-David

Attorney Andrew Zidel, an attorney who left prominent intellectual property boutique firm Lerner David in Westfield, failed in his attempt to use a minority veto to block the adoption of a law firm partnership agreement that treated retiring partners differently than withdrawing partners.

The trial court finessed the unanimity requirement found in the partnership statute, and was affirmed in an unreported decision of the appellate division.

Court Discounts Literal Language of Partnership Statute; Implies Consent to Adopt Partnership Agreement

The reason for Zidel’s failure to rely on the language of the statute was that the law firm had, for many years, operated without a formal partnership agreement. Therefore, the trial court found that the written formal agreement would be considered an amendment to the existing partnership agreement, and, under the partnership’s prior practices, it did not require a unanimous agreement.

Continue reading

  • Divorcing couples that own a business together must address business ownership issues as part of the matrimonial issues, in particular the distribution of assets.

  • An important issue when a couple divorces is how to address the family owned business in which one of the spouses was involved before the marriage.  Courts may  distribute the value of owner’s share to the non-owner spouse.

  • The divorcing couple may also have individual equity interests in a jointly owned business and must decide whether to buy out one of the spouses or continue on together as co-owners.

The divorcing couple that owns a business together has to manage the family and business relationships simultaneously. That typically involves terminating their relationship as well.

And if one of the parties owned the business before the marriage, such as a stake in a family business, it means dissecting the interests of the divorcing spouses in a way that may implicate the interests of still others.


Portrait of a confident young man and woman working together on a farm.

In a recent case before the Supreme Court in Montana, the issue was how to deal with a distribution of property when one of the sons of a ranching family was divorced from his wife after more than 30 years of marriage.

Business Divorce Issues Related to Divorcing Business Owners

The wife claimed an interest in the limited partnership that owned the ranch and argued that it should be valued for the purposes of the parties’ property settlement and not as a family business. The limited partnership vigorously disputed that she had any interest in the business.

Contact us for more information or to discuss your issue on business governance issues. 

The case, In re Frost, relies on the liberal provisions of state law that provide that anything owned in whole or in part by the married individuals is distributable in a divorce. The trial court rejected the claim of ownership, but the award in some ways treated the rancher’s wife as if she had. Continue reading

  • The effective date of an LLC member’s expulsion may be a critical issue in business divorce litigation and may be tied to critical events or the litigation.

  • Courts will look at the facts and circumstances of the case before determining the effective date, but are often guided by the parties’ own intent.

  • A court may give the expulsion a retroactive date, often the date that litigation was commenced.

One of the issues that is often near the center of a dispute over the removal of a member from a limited liability company is when the expulsion should be effective.  In other words, if the plaintiff succeeds in getting an order expelling a member, is it effective when the order is first entered or does it relate back to some other event or date?

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  • Majority Owners of closely held businesses may face claims that they engaged in minority oppression of shareholders, limited liability company members or partners.

  • Defending the minority oppression claim requires examination of written agreements and consideration of the reasonable expectations of the owners when the business was formed.

Claims of minority oppression are asserted in any number of disputes between the majority owners of a business and one or more of the minority interest holders. The oppressed minority lawsuit is disruptive, expensive and can threaten the investments and value of the majority owners.

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  • The failure of the parties to submit evidence on an issue during arbitration caused a failure to decide all of the issues of the dispute.

  • A Court may modify an arbitration award rather than vacate and permit partial enforcement while permitting litigation of claims were not included in an arbitration hearing.

  • Failure to clearly define the mechanics of an arbitration and to agree on the issues that the arbitrator is to decide can make an award unenforceable.

This court decision addresses a recurring issue when parties agree to resolve their dispute by arbitration: exactly what was it that we agreed to arbitrate? Unless the answer to that question is clear and unambiguous, trouble is likely to follow. Continue reading

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