Private company share valuations.

Valuing shares starts with what the holder owns

A share valuation considers the particular interest being valued. The percentage holding is part of the picture, alongside voting rights, dividend rights, transfer restrictions and rights on a sale or winding up.

It may be inappropriate to divide the value of the whole company by the number of shares without further analysis. The basis of value, valuation date and purpose affect the work required.

Share transfers, ownership changes and employee incentives

We can discuss valuation requirements for shareholder transactions, changes in ownership and employee share arrangements. Each engagement needs a defined scope, intended users and the relevant documents.

Where an EMI or other share scheme is involved, valuation work must be coordinated with the scheme’s legal and tax requirements. HMRC has specific procedures for agreeing certain share scheme valuations. A commercial valuation is not automatically an HMRC agreement, and acceptance is not guaranteed.

Official guidance: HMRC share scheme valuations.

The documents behind a share valuation

• The company’s financial information and business context.
• The share capital table, including different classes and options.
• Articles of association and relevant shareholder agreements.
• Recent transactions or offers, where relevant and available.
• The valuation date, purpose and intended recipients.

Clear scope before the analysis begins

We discuss the required analysis, reporting format, information and timetable before agreeing the fee. Tax submissions, legal implementation, dispute work and third-party reliance should be explicitly addressed where relevant.

If you are preparing to sell the entire business, visit business sale valuations. For the factors behind a quotation, see valuation fees and scope.