The common triggers
For some of these the law requires a valuation by a registered valuer or another qualified professional. We check which applies to your case.
- Raising money from investors, where price per share is agreed.
- Issuing shares to new shareholders or existing ones.
- Transferring shares between residents and non-residents.
- Granting employee stock options and setting their price.
- Mergers, demergers and group restructuring.
How it is done
Different methods suit different situations. Early-stage companies are usually valued on expected cash flows or comparable deals, while asset-heavy businesses may rely on net asset values. A good report explains the method and the assumptions.
What a good report contains
- The purpose and the date of the valuation.
- The business and its financials.
- The method, with reasons for choosing it.
- The key assumptions and sensitivity.
- A clear conclusion.
Plan ahead
Asking for a valuation at the last minute leaves little time to fix gaps in the numbers. Keep clean accounts and a current cap table, and the exercise is much quicker.
Quick answers
Is valuation the same as the price investors pay?
No. Investors negotiate their own price. A valuation gives a reasoned starting point and supports your filings.
How long is a valuation valid?
Reports are tied to a date and to the purpose. Rules for how long they can be relied on vary, so we confirm for your case.
This article is general information, not advice for your situation. Rules, limits and due dates change, so we confirm the current position before you act on it.