Business Valuations For Restructures – What you Need to Know

As your business grows, the business structure you use may no longer be appropriate and may need restructuring. A restructure is often taken to mean re-organisation of a corporate business structure where the legal ownership of a business or company may be changed. Restructuring can also entail the establishment of new entities in order to reorganise how assets are held. Restructures are generally undertaken for:

  • Asset protection;
  • Succession planning, and;
  • Tax minimisation.

Why do Restructures Require Valuations?

Generally the sale and purchase of assets

  • Sale of Business
  • Share Transfers
  • Planning for the Future
  • Partnership Disputes
  • Family Law Matters
  • Estate Planning
  • Company Restructures
  • Taxation Purposes

What Should a Business Valuer Consider When Forming Their Opinion?

Business valuers should consider all manner of financial, non-financial (including but not limited to operational matters, contracts, employees, suppliers and customers), industry and broader economic factors in forming a justified and defendable opinion of value.

Who Can Value a Business?

Business valuers should have sufficient experience and expertise enabling them to provide logical and defendable valuation advice.

Although there are no licensing requirements for business valuers offering their services in New South Wales, it is imperative that your valuer has completed education relating specifically to valuation matters. Such education can be completed through accounting bodies (including the institute of Chartered Accountants) and the peak industry body for Business Brokers, the Australian Institute of Business Brokers.

Key Considerations

There are a number of key considerations that are universally applicable to the value of all businesses. Things such as real property leases, employees, customers and clients, suppliers, the economy, goodwill and finances all play an important role in helping the business valuer determine the worth of the business. All of these considerations can have a significant impact on a final value of a business.

Find Out More

What are your thoughts on this matter? You are welcome to contact us to share your ideas.

Further, if you are interested in completing business valuations, we are available to help. Contact us at info@groves.com.au or call 1300 892 717 (+61 2 7208 7970) to find out more or provide feedback.

Written by Aaron Robinson

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