Valuing Shareholdings
Valuing your shares is a specialised task, and requires specialist accountancy input.
Putting an accurate value on a shareholding in a private limited company is a tricky business, however it is key you reach the right conclusion if you hope to make the most of your investment.
Obtaining an accurate valuation of a shareholding involves a number of factors that are not always immediately apparent, including:
- The appropriate date of valuation, at which the valuation should be carried out.
- Whether a minority shareholder discount should be applied and, if so, at what rate?
- The correct basis of valuation.
- Whether there ought to be compensating adjustments and, if so, what?
There have been a considerable amount of court judgments that have considered, often in great detail, the correct way of valuing company shareholdings. Most commonly, these judgments are concerned with arriving at what is called the ‘fair value’.
Before you embark on any valuation process, it is essential that you choose the right valuer. The process of company (and share) valuation is a specialist topic so do not make the mistake of assuming that any accountant is qualified or experienced enough to act as your valuer.
Although there are many specialist valuers who are experienced in the process, it is always worth seeking advice as to which valuer to appoint, and we can assist in this respect.