Share & business valuations – when might you need them?

Placing a value on a private company or unincorporated business is no mean feat. However, a business valuation can often prove invaluable or even essential. As Dafferns’ business valuations expert, I’ve listed five occasions when you might need to have your company shares and/or business valued…

  1. To prepare for sale/purchase negotiations
    Knowing how much a business is worth before negotiations start can give you a strong hand in ensuring the price is right. It can also help facilitate bridging the expectation gap between seller and purchaser.
  1. To support a tax advantaged employee share scheme
    Company share schemes make excellent employee rewards, promoting loyalty, and retaining key skills. Agreeing a share valuation with HMRC before issuing the relevant shares or share options is often necessary.
  1. To facilitate the exit of a retiring shareholder or partner
    An exiting shareholder or partner and the ongoing business often have different views on the value of their business interests. Shareholders or partnership agreements usually cater for this, but they invariably need a valuations expert to resolve disputes. In the absence of such agreements an independent valuation can be essential.
  1. To support a capital gains tax or inheritance tax calculation
    HMRC have the power to impose market value on a capital gains transaction. Negotiations between the taxpayer’s adviser and the District Valuer then follow. In addition, upon death, an individual’s entire estate (including private company shares and unincorporated business interests) has to be valued.
  1. To advise within divorce proceedings
    The Courts seek to divide the assets of a couple on a fair and reasonable basis. In order to achieve this, the total value of the couple’s assets must be known and, if business interests are involved, a valuation will be required.

To discuss the value of your business interests, contact Dafferns’ valuation expert, Brian Jukes: brian.jukes@dafferns.com or Tel: 024 7622 1046.