We value unquoted shares in trading companies, family companies, investment companies and early-stage businesses, from single small holdings to controlling stakes.
When is this valuation required?
- There is no recent arm's length transaction in the shares to rely on.
- Shares are moving between family members, co-founders or employees.
- An adviser needs a supportable value for a tax computation or return.
- A company is buying back shares or issuing new ones.
- A shareholder needs to know the value of their holding before negotiating.
Who instructs us?
- Private company shareholders
- Accountants and tax advisers
- Directors managing share issues and buybacks
- Solicitors acting on transfers, estates and disputes
What exactly is valued?
The subject is a specific number of shares in an unquoted company, with the rights given by the company's constitution and any agreement between shareholders. Previous share transactions are considered, but only given weight where they were genuinely at arm's length and reasonably recent.
How is value assessed?
In the absence of a market price, value is built up from the company's fundamentals. We value the company using income, market or asset approaches as appropriate, consider the share structure, and then address the features that distinguish the holding from a listed share: limited marketability, transfer restrictions, the absence of control for smaller holdings, and the information a buyer would have.
For tax purposes the legislation assumes a hypothetical sale in the open market, with the buyer having access to the information a prudent prospective purchaser might reasonably require. For other purposes, the information assumed to be available can differ. We apply the assumptions appropriate to your purpose.
How the approaches are usually weighed
Typical
- IncomeMaintainable earnings or discounted cash flowUsual starting point
- MarketComparable transactions and companiesCross-check
- AssetAdjusted net assetsWhere relevant
What factors influence the result?
- Lack of a market
- How difficult it would be to find a buyer and the effect on price.
- Transfer restrictions
- Pre-emption rights and director approval requirements in the articles.
- Earlier transactions
- Whether previous sales or subscriptions are a reliable guide to value.
- Information available
- What a hypothetical buyer would be assumed to know about the company.
- Company stage
- Established profitable companies and early-stage businesses call for different methods.
What information is required?
- Articles of association, shareholder agreements and the cap table
- Accounts and management information
- Details of any previous share transactions and their terms
- Forecasts, business plans or investor materials
We send a tailored information request once the scope is agreed.
What report will you receive?
We provide a report explaining the company valuation, the treatment of the share structure and the value of the holding, with the assumptions on marketability and information access stated clearly.
See types of business valuation reports for how the scope of each type differs.
Timing and cost
How long will it take?
Timing depends mainly on the company valuation. Valuations of small holdings in straightforward companies can be relatively quick; complex capital structures need longer.
How much does it cost?
The quotation reflects the work on the underlying company, the complexity of the share structure and the reporting required for your purpose.
How our fees are set →Frequently asked questions
Can I use the price of the last share sale?
Sometimes as evidence, but only if it was at arm's length, recent and between parties with similar information. Transactions between family members or with incentive arrangements attached are often unreliable guides to market value.
Why are private shares worth less than listed ones?
Mainly because they are harder to sell. Buyers usually require a lower price to compensate for limited marketability, transfer restrictions and, for smaller holdings, lack of control.
How does HMRC value unquoted shares?
By reference to market value as defined in the tax legislation, which assumes a hypothetical open-market sale and specific information available to the buyer. HMRC's Shares and Assets Valuation team may review valuations submitted for tax.
Can you value shares in a start-up?
Yes. Early-stage companies often require methods that place more weight on funding rounds, forecasts and milestones than on historic profit.
Do you need access to company management?
It helps, especially for larger holdings, but valuations of small holdings are sometimes prepared on public and shareholder information only. We state the information relied on.
