In Closely Held Business Valuations, owners recognize that their ownership interest is illiquid, sometimes entering into "buy-sell" agreements (which are often funded by life insurance) in planning for the death of one of the owners. However, the agreement also covers transactions during the lives of the owners in the event one of them withdraws from the business for one of several reasons. A valuator may be called upon to assist in deriving a business value at inception or to derive a formula for setting a value on the stock. It is advisable that a valuation be done at inception and updated each year because facts and circumstances may change from year to year.
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