Valuation clauses in the shareholders agreement

Existing agreements often already address valuation

It is common for a shareholders agreement to include a clause specifying how shares should be valued in certain situations, such as a shareholder leaving the company, a dispute between partners, or a right of first refusal triggered by a proposed sale. These clauses typically set out a method, a formula, or a process for appointing an expert.

Such mechanisms were drafted for the specific purposes the agreement addresses, at the time it was signed, and reflect what the parties considered fair or practical for those situations, which are not necessarily the same considerations relevant to a fixed reference date set by tax rules.

The reference date valuation answers a different question

An independent valuation report prepared for the 31.12.2025 reference date exists to establish the value of the shares at that specific moment, for the purpose of determining what portion of a later gain is exempt from the new capital gains treatment. It is not triggered by a transfer, an exit, or a dispute.

Because the two valuations serve different purposes, applying the shareholders agreement's formula to establish the reference date value, without independent review, risks producing a figure that was never designed to answer this particular question.

Formulas in agreements can carry the same limitations as the statutory default

Some shareholders agreements use a simplified formula similar in spirit to the statutory equity-plus-EBITDA calculation, chosen for ease of administration between the parties rather than precision. Where this is the case, the same limitations discussed elsewhere, such as ignoring real estate value or excess cash, can apply equally here.

Other agreements refer instead to an independent expert to be appointed when a valuation is needed, which is closer in spirit to the process used for the reference date report, though the expert and scope may still differ.

Reviewing the agreement alongside the reference date report

Reading the shareholders agreement's valuation clause before commissioning an independent report for the reference date helps clarify whether the two processes are aligned or whether they are expected to produce different figures for different purposes. This avoids confusion later if both valuations exist side by side for the same company.

Updating agreements is a separate exercise

Some shareholders may take the opportunity, once an independent reference date valuation exists, to review whether their agreement's own valuation clause still reflects how they want future transfers to be priced. This is a matter for the shareholders and their advisers to consider separately from the reference date exercise itself.