Business Valuation – At Bradshaw Johnson we have spent many years valuing businesses. We provide an expert opinion on the value of a business and the methodology behind our valuation. Whilst a business shall always be worth the value which a buyer is willing to pay for it, we can work with buyers and sellers to ensure a fair multi-faceted valuation. Business valuation can be required at unexpected times due to unforeseen circumstances. We offer a full support service throughout the process to ensure that you have a complete understanding of all proposals.
Whole Company Business Valuation
We are often required to value business interests, typically limited companies, but also business interests constituted as partnerships, limited liability partnerships and sole traders. Our approach is to value the company on both the earnings basis of valuation and net assets basis of valuation. We determine maintainable earnings having considered and adjusted as necessary historic statutory accounts, current year management accounts, budgets and financial projections. We determine net assets having restated the balance sheet to current market values and separately considered the value of any goodwill.
The valuation of an individual shareholding is not necessarily a straightforward pro rata percentage, of the Business valuation as a whole. This is because of the rights and benefits attaching to different levels of shareholding as a result of the Companies Acts, the company memorandum & articles of association and any shareholders agreements.
An individual must own more than 50% of the ordinary share capital in order to pass an ordinary resolution which can cover most matters. An even higher shareholding of 75% is needed to pass a special resolution for a special significant purpose. Hence a shareholding may be subject to a discount for minority interest. The discount level varies, dependent on the level of shareholding being valued, its relationship to the other shareholdings and the overall number of shareholders involved. Our starting point is the various published guidance in this area as a reference point adapted and tailored thereafter to the specific circumstances of the shareholding to be valued. We will also consider any previous transactions in the company’s share capital.