Business Valuation

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This is related to a fair compensation for an equity interest in the company. Shareholder agreements tend to have vague terms of ‘value’ and can be understood in various ways – this can influence the resulting value of an equity interest, making it biased. Since standard terms like ‘fair market value’ and ‘fair value’ can...

Ideally, shareholders should first mutually agree on the value of each other’s equity interest in the company under various circumstances, then detail these decisions in the shareholder agreement for future reference. They should also be reviewed and revised with the annual business reports. Unfortunately, reaching a mutual agreement amongst shareholders involves its complexities and challenges....

A common shareholder agreement has specific terms and conditions regarding the selling of the company’s shares, which is a likely outcome following a shift in shareholder’s interest in the company. Hence it is crucial for shareholders to identify and address possible ‘triggering events’ that would influence their interests in the company. The following lists some...