How is a company valued in a Swiss divorce?

In Swiss divorce proceedings, a business owned by one spouse is valued at its 'objective market value' for equitable distribution purposes. Courts typically use the Praktikermethode, but the valuation date and treatment of goodwill are heavily contested. ### Technical Explanation #### Legal Framework Under Swiss matrimonial property law (ZGB Art. 197ff), business interests acquired during marriage fall into the 'Errungenschaft' (acquired property) and are subject to equitable division. The key questions: 1. Valuation Date: Generally the date of separation or filing, not the date of sale. This creates disputes if the business value changes significantly between separation and trial. 2. Valuation Method: Swiss family courts predominantly apply the Praktikermethode (Tax Circular 28), sometimes supplemented by market approaches. 3. Goodwill Treatment: Courts distinguish between: * Institutional Goodwill: Value inherent in the business (customer relationships, brand, location) — included in valuation * Personal Goodwill: Value tied to the owner's personal reputation and skills — often excluded This distinction is critical: a medical practice's value may be 80% personal goodwill (excluded) vs. a manufacturing company where nearly all goodwill is institutional (included). 4. Hidden Reserves: Courts require full disclosure and adjust statutory accounts for hidden reserves. Attempting to suppress value through accelerated depreciation or excessive provisions is a sanctionable offense. 5. Minority Discount: If the spouse owns less than 100%, a minority discount (20-30%) may apply. If the spouse controls the company, no discount is permitted. #### Practical Impact For an owner-managed SME with CHF 2M Praktikermethode value, the divorcing spouse may be entitled to CHF 1M (50% of the increase in value during marriage). This often forces a sale, refinancing, or installment arrangement.