Share Valuation Disputes arise when a partner leaves a business, shares are forcibly bought out, or during divorce proceedings involving business asset division. The main question is: what is the share actually worth? Often, managing partners try to undervalue the company to pay the exiting partner less, or conversely, the exiting partner demands an unrealistically high sum. Disputes also concern valuation methodology (Discounted Cash Flow vs. Asset Value). In Georgia, where financial transparency is often low, determining "fair market value" is a complex process requiring forensic expertise. Legal.ge offers lawyers who work with financial experts to protect your financial interests and ensure adequate compensation for your share.
What Does Share Valuation Service Cover?
The service aims to establish objective value and fair compensation. It includes:
- Exit Compensation: Disputes over the payout amount when a partner leaves the company.
- Forced Buyout (Squeeze-out): Protecting minority rights when the majority forces them to sell shares at a low price.
- Appointing Auditors: Petitioning the court to appoint an independent auditor to determine the company's real value.
- Financial Analysis: Uncovering hidden assets and revenues to increase valuation.
- Family Disputes: Valuing business shares during the division of property between spouses.
Real-World Scenarios Where You Need a Lawyer
For example, you are leaving an LLC where you own 30%. Partners offer 10,000 GEL because "there is no profit on the books." However, you know the company owns expensive real estate and has unofficial income. A lawyer will request a court expertise that evaluates not just "paper" profit but the market value of assets, potentially increasing compensation to 100,000 GEL. Another example: during a divorce, a husband claims his business is losing money. A lawyer will appoint an audit to determine the real value of the share for division.
Georgian Legal Framework
Share valuation relies on the "Law on Entrepreneurs" and International Valuation Standards (IVS). The law requires "fair compensation" upon partner exit. In disputes, the court appoints an expert via the Samkharauli Bureau or a private auditor. The issue of "Minority Discount" is important — a lawyer must fight to ensure the share is valued proportionally and not discounted because it is a non-controlling stake.
The Process Step-by-Step
1. Document Retrieval: Requesting financial statements. 2. Initial Valuation: Preparing a report by a private auditor. 3. Negotiation: Offering a price to partners. 4. Lawsuit: Filing a claim for buyout and price determination. 5. Court Expertise: Determining the final price.
Why Choose a Specialist on Legal.ge?
Share valuation synthesizes financial and legal knowledge. Incorrect valuation can cost you a lot of money. On Legal.ge, you will find lawyers who understand business value and know how to defend it in court.
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