Buy-Sell Valuations

Partners need a buy-sell agreement. 
Buy-sell agreements need a valuation. 

Why a Valuation

A buy-sell agreement is a legally binding document that determines how a partner or shareholder in a closely held business may purchase the interest of another partner or shareholder who withdraws from the business. Integrating a business valuation into a buy-sell agreement is often critical to ensuring that all shareholders are treated fairly and equitably if one executes the agreement. Likewise, the absence of a buy-sell often triggers a valuation during partnership disputes.

Buy-Sell Valuation Scenarios – Some of the most common scenarios include:

Examples

  • No Buy-Sell

  • Shareholder Litigation
  •  Initial Buy-sell

  • Death of Shareholder

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Triggering Events

There are many types of events that trigger the need for a valuation amongst shareholders. Those may include:

  • Shareholder disputes
  • Death of a shareholder
  • Insurance requirements

With regards to valuations of these types, our engagement is often guided by the terms laid out in the agreement when one exists. For instance, does the agreement provide for the application of Discounts for Control and Marketability? In other cases we are calculating value on a control / marketable basis regardless of the characteristics of the block of shares valued.

More Types of Business Valuations

BUY-SELL AGREEMENTS

Quantive performs business valuations in support of buy-sell agreements, to include buy-ins and -outs, as well as shareholder disputes.

VALUATIONS FOR DIVORCE

We perform business valuations in support of divorce proceedings, working either jointly retained or on behalf of one spouse.

PURCHASE AND SALE

Smart entrepreneurs routinely retain Quantive to understand price early and gain a roadmap for impending price negotiations.

LITIGATION SUPPORT

We provide litigation support for shareholder disputes, lost profits, shareholder oppression, commercial litigation, and various other reasons.

ESTATE AND GIFT

We perform valuations in support of various gifting strategies, as well as in support of probate requirements.

SBA LOANS

Quantive is qualified to perform valuations in support of SBA financing. Our reports are compliant with all SBA SOP’s.

INSURANCE

Quantive values companies for a variety of reasons related to insurance to include establishing values for funding buy-sell agreements.

OTHER

We perform valuations for business planning, gap analysis, lost profits and damages, and a variety of other reasons.

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