Company Valuation

[Iain-Le-Roi]

Hi

My partner and I set up a joint share holder ltd company (50/50) origionaly valued at £100 in total when we set it up. We have now decided to have two seperate companies to make things easier as we are both IT contractors on different rates.

Now I am buying her 50 shares in the company how do I go about valuing the company. Is the price up to us or are there guidelines I should be following? I want to avoid paying any stamp duty which I belive we would pay if the company was valued at £2000 and therefore I would have to buy her out for 1k.

Thanks and any questions just fire them back.

Iain

[Wanderer]

Now I am buying her 50 shares in the company how do I go about valuing the company. Is the price up to us or are there guidelines I should be following? I want to avoid paying any stamp duty which I belive we would pay if the company was valued at £2000 and therefore I would have to buy her out for 1k.

Your accountant can probably sort this pretty easily but most likely, the company doesn't have any value so you just pay out any retained profits as dividends, then buy the shares back from the other shareholder for the same amount that they paid for them (typically 1 pound). Then they resign as a company director leaving you as sole owner and director of the company.

[northernladuk]

Your accountant can probably sort this pretty easily but most likely, the company doesn't have any value so you just pay out any retained profits as dividends, then buy the shares back from the other shareholder for the same amount that they paid for them (typically 1 pound). Then they resign as a company director leaving you as sole owner and director of the company.

That Wanderer talks some sense!

[thunderlizard]

want to avoid paying any stamp duty which I belive we would pay if the company was valued at £2000

Stamp duty on £2000 would only be £10 wouldn't it?