Valuing businesses

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  • #31800
    Anonymous
    Guest

    I have a case where the clt and his wife are the only directors of a limited company. The clt pays himself £100 per week even though the company has a turnover in 6 figures and is making a good profit.

    Is there any way to value the company? In other words how much it would be worth if the clt decided to to sell it to someone else as a going concern.

    Any advice appreciated.

    #41863
    John Boxall
    Participant

    What you need to be looking at is not the value of the company – it falls to be disregarded, but notional income under Reg 42.

    Also are they paying themselves a dividend?

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #88939
    Anonymous
    Guest

    Thanks John. Can you tell me where it says that the value of the company is disregarded?

    #88940
    John Boxall
    Participant

    It’s not in Schedule 6………..

    It’s somewhere funny but I can never remember where

    Can anyone else help?

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #88941
    Anonymous
    Guest

    See: http://hbinfo.org/forum/viewtopic.php?t=13562

    I don’t think its quite as straightforward as John suggests, if someone owned a company the size of Tesco you probably wouldn’t want to disregard it. Depends on the nature of the company.

    #88942
    John Boxall
    Participant

    49(5) and (6).

    Trouble of course is that it says ‘may’ without giving much away as to when we should be treating him as holding the capital.

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

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