Start with what is being transferred
List the share class, number of shares and documents defining the proposed transaction. A shareholder loan is a separate item to identify, rather than quietly folding it into the share price. Ask the legal advisers to confirm which rights and obligations matter to the instructions. The financial analysis should then state clearly what it does and does not include.
Use the percentage as a question
Illustration only: 25% of an assumed £1 million equity value is £250,000. That arithmetic does not establish whether £1 million is the correct equity value or whether a straight proportion is the required basis for this transfer. It also says nothing about a separate loan balance, transaction costs or payment terms. Write those questions beside the calculation before treating it as an offer.
Do not assume a universal minority adjustment
The appropriate treatment depends on the purpose, facts and legal framework. ICAEW’s case-law resource illustrates that shareholder disputes can produce different valuation outcomes. The practical lesson is to obtain instructions specific to the situation, not to select a standard discount from an online article. This guide does not determine the legal entitlement of any shareholder.
Separate value from settlement terms
A price paid immediately and the same headline amount paid later are different financial proposals. Put timing, conditions and any separate balances in a schedule. Financial modelling can help explain the assumptions, while the solicitor reviews protections and enforceability. An agreed buyout price ultimately needs to be considered with the whole proposed arrangement.
Prepare for the conversation
- Gather the articles, shareholder agreement and share register.
- Separate shares, loans and other proposed payments.
- Confirm the basis before discussing any adjustment.
Further reading: ICAEW: valuation cases.
General preparation guidance, not a valuation opinion or legal or tax advice. Any assignment is subject to an agreed scope, suitability and intended-use review. Examples are illustrative, not client cases.