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Drafting Valuation Provisions for Closely Held Businesses in Buy-Sell Agreements and Governance Documents

Methodologies and Adjustments: Accounting for Real Estate Assets, Goodwill

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, September 28, 2023

Recorded event now available

or call 1-800-926-7926

This CLE course will examine practical and legal issues in determining a closely held entity's value when facing a sale of a portion or the entire ownership interest. The panel will discuss the various forms of valuation methodology and how to incorporate these terms into governance documents and buy-sell agreements, as well as address future adjustments and the implications of valuing real estate and goodwill assets.


When representing a closely held entity, whether a corporation, LLC, or partnership with a small number of owners and that is not publicly traded, it can be difficult to discern the business' value. Whether the owners are looking to sell a portion of the company or the entire enterprise, creating a framework for valuation early in the corporate legal development can alleviate future disputes.

There are numerous valuation methodologies and advantages and disadvantages to using each method. Some methodologies favor particular industries and whether conflicts of interest exist or where a fiduciary duty is present. Drafting these provisions can also forestall future disputes among owners.

Outside of governance documents, corporate counsel might consider drafting buy-sell agreements that include methodology and adjustment provisions. However, counsel must consider when and how to incorporate an entity's real estate, whether it should be part of a single-asset sub-entity, and how and when to address goodwill as part of the business value.

Listen as our authoritative panel discusses best practices for drafting valuation provisions in corporate governance documents and buy-sell agreements. The panel will address various valuation methodologies and how corporate documents can anticipate adjustments and fixed value of all assets, including real estate and goodwill.



  1. Valuation methodology
    1. Net asset value
    2. The earnings approach
    3. Dividend-paying capacity
    4. The market approach
  2. Valuation adjustments
    1. Lack of marketability
    2. Minority interests
    3. Loss of a key person
    4. Built-in capital gain
  3. Buy-sell agreements and fixing value
  4. Attribution of value
    1. Real estate assets
    2. Goodwill as asset


The panel will review these and other key issues:

  • How should counsel assist in determining the value methodology in corporate governance documents and buy-sell agreements?
  • When should value adjustments be made to corporate documents to reflect business growth?
  • When should a buy-sell agreement address fixed value?
  • How can counsel work with appraisers, accountants, and other professionals to determine or calculate business assets, including real estate and goodwill?
  • When should real estate be spun away from other assets in determining value?


Dieters, Harold L.

Senior Managing Director
Empire Valuation Consultants

Mr. Deiters is a trained professional in preparing business valuations and performing forensic accounting. His...  |  Read More

Rappaport, Matthew
Matthew E. Rappaport, Esq., LL.M.

Vice Managing Partner
Falcon Rappaport & Berkman

Mr. Rappaport counsels clients on technical and complex tax issues. He works closely with closely held business owners,...  |  Read More

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