Valuing shareholdings

Identifying a Valuer

Choosing the identity of a valuer can have a significant impact upon the ultimate valuation arrived at.

It is always important to identify an appropriately qualified valuer who has experience of not only the relevant industry in which the company operates but also has experience of dealing with companies of that size and type.

Practical considerations, such as the cost of the valuation, are also of obvious relevance.

Whenever the question of identifying a valuer arises, it is normal for at least one or other party to suggest that the company auditors or accountants should carry out that role.

This has obvious attractions in that the company auditors / accountants will be fully familiar with the company already and this in itself will also help to keep down costs.

However, in practice, it may well be that the company auditors / accountants cannot be truly independent or, at least, cannot be seen to be truly independent as they may well (consciously or sub-consciously) have a natural allegiance in favour of whichever individual(s) will remain in control of the company after the valuation.

After all, they will be the individual(s) who will determine whether or not the auditors / accountants are reappointed in future years.

In the absence of any agreement on the identity of a valuer, the most appropriate course of action is normally to agree that the parties should ask the President for the time being of the Institute of Chartered Accountants in England and Wales to independently identify a valuer and for the parties to be bound by his / her decision.

If you are looking for a suitable valuer, experienced in valuing Companies and shareholdings, why not contact us and we will be happy to suggest an appropriate valuer to you.