valuation of goodwill

This query is : Resolved

S.K.Patel

S.K.Patel (Querist)
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22 June 2008 3 brothers decided to do joint business.A and B were at native place doing business which after 12 years reached a turnover of say Rs.10 per year.C was at Delhi in service and started part time business which reached same turn over in 6 years.He called B from native place as growth was faster in Delhi.After another 17 years the turn over of Delhi business is Rs.600.In this also his education and contacts played slightly higher role.

Now they want to separate.C wants to retain business at Delhi.Business at native place is closed for last 17 years and A is just looking after family properties.

Shall the goodwill be divided equally? C feels that he should get more as he is the pioneer of the business in Delhi.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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24 June 2008 C surely deserve more. but this have to be decided mutually. these cases are not settled by law. in that way it will take long time to settle. if A and b understand the value of contribution of C, they shud pay him more.