120.2 Valuation of the shares

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BUSINESSES vol 4(2) start-up, sale and purchase

120.2 Valuation of the shares

Copyright © 2025 LexisNexis

| Commentary

The valuation of the shares is likely to be the most controversial part of the pre-emption process. It is generally in the interest of all parties for a disaffected shareholder to leave without dispute. This is unlikely to happen if that shareholder feels that they are not getting a fair value for their shares. It is vital therefore for the agreement to provide for a fair valuation of the outgoing shareholder’s shares.

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(1) START-UP

120.3 Notification and offers

120.4 Completion

121 Location of pre-emption procedures

122.1 Possible clauses in a shareholders’ agreement

122.2 General principles relating to restrictive covenants

122.3 Application to shareholders’ agreements

123 Termination of the business

124 Winding up of the company

125 The main remedies for breach of a shareholders’ agreement

126.1 Damages

126.2 Equitable remedies

127 Leaving the company

128.1 The provisions of the Companies Act 2006 Section 994

128.2 The meaning of unfair prejudice

128.3 Unfair prejudice in the context of a shareholders’ agreement

128.4 Remedies for unfair prejudice

128.5 Valuation of the company’s business

128.6 Discounts and premiums

128.7 Problems in petitioning for breach of a shareholders’ agreement

129 Petitioning for the winding up of the company