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IP Valuation

How much does an IP valuation cost?

The cost varies based on the complexity of the asset and the purpose of valuation. A simple trademark valuation for internal use is cheaper than a complex patent valuation for litigation or tax reporting. We provide a quote after an initial assessment of the scope and methodology required.

Is IP valuation necessary for tax purposes?

Yes, especially for transactions between related parties (Transfer Pricing). If you transfer IP to a subsidiary or license it to a related company, the price must be at "arm's length" (market value). A formal valuation report protects you from tax penalties for underpricing or overpricing assets.

Can I value a startup idea?

Valuing an idea alone is difficult and speculative. However, if the idea is secured by IP (patent application, copyright, prototype) and has a business plan, we can value it using income-based approaches (DCF). This is crucial for early-stage startups negotiating equity with investors.

What standards do you use for valuation?

We adhere to International Valuation Standards (IVS) and ISO 10668 (Brand Valuation). These standards ensure that the valuation is objective, transparent, and accepted by auditors, courts, and investors globally, not just in Georgia.

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Intellectual Property (IP) Valuation is a complex process determining the monetary value of intangible assets. In modern business, a significant portion of a company's value often lies in brands, patents, and software. IP valuation is essential not only for buying and selling but also for tax purposes, attracting investment, claiming damages in court, and financial reporting. In Georgia, this field requires both legal and financial expertise to ensure the valuation is objective and recognized by state bodies or international investors.

What IP Valuation Services Cover

Specialists listed on Legal.ge offer valuation services for various purposes:

  • Determining Market Value: Establishing the real price of an asset (trademark, patent, copyright) before alienation or licensing.
  • Damage Calculation for Litigation: Calculating the amount of damages and lost profits caused by IP infringement for presentation in court.
  • Tax Purposes and Transfer Pricing: Confirming asset value for tax authorities, especially during transactions between related parties.
  • Contribution to Capital: Valuing an IP object for its placement as a non-monetary contribution to a company's charter capital.
  • Determining Royalty Rates: Calculating an adequate royalty rate based on market analysis.
  • Investment Valuation: Establishing the value of a startup or technology for negotiations with investors.

Practical Examples and Scenarios

The need for valuation arises at various stages:

  • Litigation: A competitor illegally used your patent. For the court to award compensation, expert evidence is needed to show the actual harm suffered and income lost.
  • Loan Collateral: A bank is willing to issue a loan if you pledge your valuable trademark as collateral. The bank needs an official valuation to confirm the asset's liquidity.
  • Mergers & Acquisitions: A large company buys a small tech firm. A large part of the price is attributed to "Goodwill" and patents. Separate valuation is necessary to record them on the balance sheet.
  • Tax Audit: A company transferred a brand to a subsidiary offshore. The tax authority checks if the price was artificially lowered to avoid taxes.

Georgian Legal Framework

The valuation process relies on International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS), which are recognized in Georgia. Legally, the Civil Procedure Code of Georgia defines rules for conducting expertise during disputes. The Tax Code of Georgia regulates principles for determining market price for tax purposes. Valuing contributions to company capital is governed by the Law of Georgia on Entrepreneurs, which requires a report from an independent auditor/valuator on the value of non-monetary contributions.

The Process: Working with a Specialist

Qualified valuation requires a methodological approach:

  1. Defining the Purpose: Why is the valuation being done (sale, court, accounting)? This influences the methodology.
  2. Legal Audit: Before valuation, the lawyer verifies that the asset truly belongs to the client and is protected.
  3. Choosing a Method: Three main approaches are used: Cost approach, Market approach, or Income approach.
  4. Analysis and Calculation: The expert processes data and forecasts the benefits to be derived from the asset.
  5. Report Preparation: A detailed report is compiled, which can be presented to a court, investor, or tax authority.

Why Legal.ge?

Intellectual property valuation is not just about numbers; it is the intersection of law and finance. Legal.ge gives you access to experts with experience in IP valuation who can prepare substantiated, credible reports for your business needs. Find the right specialist on Legal.ge to know the real price of your intangible assets.

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Specialists for this service

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