OUR GREAT MINDS

by Claudius Du Plooy

9 Important Questions About Unanimous Shareholder Agreements

8. How can the USA affect Valuation

There are several methods that can be used in a USA to determine share price. These include:

  • Periodic Agreement: The parties commit to agree upon a value from time to time, for example on an annual basis.
  • Specified Formula: This could be based upon book value, a multiple of earnings or cash flow, or another appropriate basis for the company.
  • Determination by a Third Party: Parties will often enlist professionals, such as accountants or business valuators to determine share value. In this case, it is important that parties agree in advance to be bound by the independent valuator’s determination.
Claudius Du Plooy

Claudius’ varied and interesting experience as a commercial lawyer lead him to be a broad generalist in commercial law with specialization in certain key areas such as acquisitions, financing and securities law as they relate to general corporate commercial law. This gives him the ability to draw critical connections, act as strategic advisor on macro level issues and provide practical, experienced business law advice. Creativity is an important part of his life and finds that business law, far from being dry and unimaginative, allows him to create innovative and workable solutions for his clients. When he is not at work building a law firm, he keeps himself busy with abstract painting and sculpting, sailing or going to music festivals.

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