How do I find out the value of a share?

Private limited company share value

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I have been informed that my late father was the owner of one ordinary share in a private limited company that has 9500 shares. My mother is the executor of his estate. He died 16 years ago. The company are expecting us just to transfer the share back to them without any financial consideration. How do I find out the value of the share? We have never received any dividends. 

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By Andy556
18th Nov 2020 12:13

As it's a private limited company then the only way would be a getting valuation completed.
The chances are one share out of 9500 is not worth much.
Regarding the dividends, you'd need to find out if any have been paid and if his share class was entitled to any if they had been paid.
What's the company name? You can check the balance sheet to get a rough idea

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paddle steamer
By DJKL
18th Nov 2020 12:18

Start with asking the company secretary for copies of the accounts, something any shareholder is entitled to receive.

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Replying to DJKL:
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By lionofludesch
18th Nov 2020 12:30

DJKL wrote:

Start with asking the company secretary for copies of the accounts, something any shareholder is entitled to receive.

This is the key.

Make yourself enough of a nuisance and somebody will give you a few quid to go away.

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By the_drookit_dug
18th Nov 2020 12:19

How have they gone about asking for the share back? Did they just say 'oi, give us that share you've got there'?

A bit rude.

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By paul.benny
18th Nov 2020 13:17

You can find a substantial amount of information for free here
https://find-and-update.company-information.service.gov.uk/

If the company qualifies as Small, the accounts will be of limited value but shareholders are entitled to receive the full accounts.

If you care to post the name of the company, I'm sure people here will give a view.

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By Toby Tucker
18th Nov 2020 13:49

The company is C H Johnson Ltd.

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Replying to Toby Tucker:
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By tom123
18th Nov 2020 13:56

£50.00

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By tom123
18th Nov 2020 13:57

And ask what happened to the dividends

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By lionofludesch
18th Nov 2020 14:01

tom123 wrote:

£50.00

If I got £100 for my share, I would've thought I'd done very, very well.

Go to the next AGM and ask a lot of questions.

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Replying to Toby Tucker:
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By Paul Crowley
18th Nov 2020 14:02

Not the correct full name, but worth £100
Agree Be a nuisance
Get the accounts, full accounts as there could have been dividends for years
Noted that majority shareholder claims to be a solicitor

EDWARD JEFFERIES 1 Share

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By Toby Tucker
18th Nov 2020 14:16

Thanks everyone. Good advice. I’ll let you know what they say!!

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By paul.benny
18th Nov 2020 14:16

There is a company in Manchester that used to be called CH Johnson, company number 00055771. They are now called Heimbach Limited and are wholly owned by a German company of like name. The group supply the paper industry.

Company number is the definitive identifier - if you have share certificate, it should show the company registration number and you can confirm that this is the correct company.

The documents available online only go back to the last 1990s and there were no private shareholders at that time.

There are provisions in company law to oblige small shareholders to sell once an acquiror owns more than 95(?)%. If this is the right company, my guess is that your father would have been required to sell when Heimbach took control.

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Replying to paul.benny:
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By Anonymous.
18th Nov 2020 14:30

paul.benny wrote:

There is a company in Manchester that used to be called CH Johnson, company number 00055771. They are now called Heimbach Limited and are wholly owned by a German company of like name. The group supply the paper industry.

Last accounts, on CH website, to December 1994 show issued share capital 2 million 25p shares.

Share capital was increased in May 1991 but details not online.

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Replying to paul.benny:
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By Toby Tucker
18th Nov 2020 14:31

The company is C H Johnson & Co (Hanley) ltd.

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By Toby Tucker
18th Nov 2020 14:18

Just got an answer from them. They’ve offered £150. Is it worth asking about dividends or should I just accept their offer?

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Replying to Toby Tucker:
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By lionofludesch
18th Nov 2020 14:24

Toby Tucker wrote:

Just got an answer from them. They’ve offered £150. Is it worth asking about dividends or should I just accept their offer?

Fantastic deal !

But I'd still ask about dividends.

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Replying to lionofludesch:
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By Anonymous.
18th Nov 2020 14:32

lionofludesch wrote:

But I'd still ask about dividends.

Looked at various accounts and they don't appear to have paid any going back as far as 1994

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Replying to Toby Tucker:
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By Anonymous.
18th Nov 2020 14:36

Toby Tucker wrote:

Just got an answer from them. They’ve offered £150. Is it worth asking about dividends or should I just accept their offer?

I would write and ask how much Heimbach paid to acquire the C H Johnson Limited in (what appears to be) 1999.

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Replying to Anonymous.:
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By Toby Tucker
18th Nov 2020 14:42

I don’t think that’s the same company.

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By lionofludesch
18th Nov 2020 14:46

Anonymous. wrote:

Toby Tucker wrote:

Just got an answer from them. They’ve offered £150. Is it worth asking about dividends or should I just accept their offer?

I would write and ask how much Heimbach paid to acquire the C H Johnson Limited in (what appears to be) 1999.

OP says the share capital of his company is £9500. Why are you wittering on about a wholly owned subsidiary company which clealy doesn't identify with the OP's company ? Albeit that he didn't correctly state its name.

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Replying to lionofludesch:
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By Anonymous.
18th Nov 2020 15:08

lionofludesch wrote:

OP says the share capital of his company is £9500. Why are you wittering on about a wholly owned subsidiary company which clealy doesn't identify with the OP's company ? Albeit that he didn't correctly state its name.

Congratulations on your appointment as site moderator. Did your mother never tell you to say nothing if you haven't anything nice to say?

The OP said at 13.49 that "The company is C H Johnson Ltd" which is now Heimbach UK LImited

To be accused of wittering by you is, how can I put it, ironic!

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Replying to Anonymous.:
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By Tax Dragon
18th Nov 2020 15:23

Careful, that's a nominee for this year's Accounting Excellence Awards that you're talking to.

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Replying to Tax Dragon:
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By lionofludesch
19th Nov 2020 16:29

Tax Dragon wrote:

Careful, that's a nominee for this year's Accounting Excellence Awards that you're talking to.

Oh no !

Is that something that will cost me money ?

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Replying to Anonymous.:
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By lionofludesch
18th Nov 2020 15:32

Anonymous. wrote:

The OP said at 13.49 that "The company is C H Johnson Ltd" which is now Heimbach UK LImited

I'm used to viewing information provided by folk with a critical eye.

Maybe you should consider that too.

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Replying to Toby Tucker:
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By Anonymous.
18th Nov 2020 14:36

Duplicate

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Replying to Anonymous.:
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By Missing in action
18th Nov 2020 20:43

Anonymous. wrote:

Duplicate

What a disappointing way for this strand of the thread to end. It was just heating up ;-)

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paddle steamer
By DJKL
18th Nov 2020 15:23

The fair value of the investment properties was carried out by the directors, I might wish to ask them for a list of the investment properties with postcodes held and any third party valuation reports they will part with before parting with my share, a chase around google maps and local planning websites will give a better understanding if there are any hidden development gems (remembering that investment property tends to get red book valued as existing use e.g. we have one site which has a red book valuation in 2016 of £2.25 and since then we have turned down £6.3m for it as it may be worth £8 as is and likely well over £10m if we develop ourselves)

There should be no rush, if they want the share see how much info they will voluntarily give you, that in itself may be an indication how much they want the share.

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Replying to DJKL:
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By Paul Crowley
18th Nov 2020 15:46

Agreed
Accounts figures may be cost

A solicitor would be expected to understand the difference between market value and cost, and the controlling party is a solicitor.

That trade not well known for unneeded generosity

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Replying to Paul Crowley:
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By lionofludesch
18th Nov 2020 16:01

Paul Crowley wrote:

Agreed
Accounts figures may be cost

I would hope not.

I would hope that they at least made a stab at a fair, if conservative, valuation.

We are, of course, talking small beer here.

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Replying to Paul Crowley:
paddle steamer
By DJKL
19th Nov 2020 11:05

Effectively you are saying that us property developers will try to legover anyone we deal with, how insulting but true- property and the phrase "never give a sucker an even break" step hand in hand.

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By fawltybasil2575
18th Nov 2020 17:53

@ Toby Tucker (OP).

(1) I note your saying:-

“I have been informed that my late father was the owner of one ordinary share in a private limited company that has 9500 shares. My mother IS (emphasis added) the executor of his estate. He died 16 years ago”.

At face value, the above words imply that administration of the Estate has still not been completed. Please explain/elucidate (advising what value was placed on he share for Probate purposes).

(2) I also note your words:-

“The company are expecting us just to transfer the share back to them without any financial consideration”.

I am intrigued. Taking at face value their words “without any financial consideration”, you are saying that, presumably in an unsolicited letter (please clarify), the company wanted the shares FREE. That request reduces to nil the chance of my asking myself whether their approach to you was entirely in good faith.

(3) Importantly, have you been receiving documents, in the last 16 years, from the company, eg the Financial Statements, Notices of Annual General Meetings ? Your response will assist in my further advices.

(4) Whilst probably a matter of relative unimportance, I do note that company's Financial Statements do show Dividends in the year to 31 December 2010.

(5) At this stage, I am compelled to respectfully disagree with some eminent members above, that you should now accept “buttons” (eg £50/£100/£150) for the shares. In not dismissing the possibility that the shares are only worth that amount, it is FAR TOO EARLY to make that judgment call.

Firstly, you have seen (presumably) only the LAST Financial Statements. This company has investment properties: without further enquiry, one does not know whether the Investments have been correctly valued (at the Balance Sheet date): and furthermore, one or more of the market values COULD have increased after the Balance Sheet date: in exceptional but not unprecedented circumstances, massively so (certainly not unknown in the field of Land and Buildings, eg a Property with hitherto a nominal value for an adjoining undeveloped field suddenly obtains planning permission and the field value increases "a hundred fold").

One of other scenarios is where the owners of the other 9500 shares have received a huge offer for the sale of the company, the prospective purchaser wanting the “irritant” holder of the one share off the scene before completing.

Overall, you need professional guidance. I appreciate the possibility, as stated above, that the share has only minimal value: BUT there are SEVERAL scenarios in which its value could be very substantially more.

As a newcomer to the site, you will be unaware of the background of many of the previous posters: at the risk of seeming obsequiousness, DJKL (I hope he will forgive me for mentioning him) is a hugely knowledgeable resource for guidance on all property-related matters.

Basil.

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Replying to fawltybasil2575:
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By Toby Tucker
19th Nov 2020 15:04

Hi, thanks for your help. I’ll try answer your questions.
There was no official administration of my dad’s estate, it didn’t go through a solicitor. Everything just went to my mum.
We did not know about this share until we were contacted by the company’s accountants. They have sent through paperwork for my mother to sign to transfer the share. The ‘consideration’ is completed ‘nil’. They assumed that we would just transfer it over. They said it was always understood that when my father left the company he would hand back the share. My father actually left them in 1982. We have never received any communication or information from them.
Any advice you can give would be gratefully received. I am a complete novice in all of this!

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Replying to Toby Tucker:
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By lionofludesch
19th Nov 2020 15:26

Toby Tucker wrote:
They said it was always understood that when my father left the company he would hand back the share. My father actually left them in 1982.

And it took them 38 years to prep the paperwork ?

Seems unlikely.

How much effort are you prepared to put into this? As DJKL correctly says, the valuations are only the directors' opinion and could be - more than likely are - on the low side.

On the other hand, to get an extra £100 for your share, you're going to need to show that they're undervalued by £950,100. Is that realistic? Are you prepared to pay for valuations ? Which may or may not support yout view?

Only you can answer that.

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Replying to lionofludesch:
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By Toby Tucker
19th Nov 2020 15:59

I’m not wanting to take this all the way and pay for valuations etc. Just don’t want to get ripped off. And what about dividends? Should they include an amount to compensate for those? No idea what they are though!!

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Replying to Toby Tucker:
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By lionofludesch
19th Nov 2020 16:52

Were there any dividends? There don't have to be. A copy of the full shareholder version of the accounts should tell you. We don't have access to that.

Broadly, if nobody else got a dividend, you don't either. There 's no "compensation" for not getting one.

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Replying to lionofludesch:
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By Cheshire
20th Nov 2020 13:00

Deleted as the OP couldnt be arsed answering my Q

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By bettybobbymeggie
18th Nov 2020 20:50

I'd hold out for £175

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By paulwakefield1
20th Nov 2020 09:04

The unanswered question is why now?

They have obviously gone to some trouble to trace ownership if they knew your mother now held the share.

Maybe £150 is a result but I would be wanting to have a sniff around first.

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Replying to paulwakefield1:
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By lionofludesch
20th Nov 2020 09:53

£150 is roughly double the last available balance sheet total, divided by 9501.

There's always the option for the company to say, "tell you what, you keep your 0.010525% holding."

In which case, the shareholder gets nothing.

Don't be too greedy.

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By paulwakefield1
20th Nov 2020 09:06

Duplicate

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By fawltybasil2575
20th Nov 2020 11:18

@ Toby Tucker (OP).

I thank you for your post at 15.04 yesterday.

I gave examples, in my last post, of two scenarios in which the value of the share could be substantially in excess of the “paper value” (ie the Net Assets per the 31 December 2019 Financial Statements divided by the 9,501 shares at that date). Another scenario example is if the company has, since 31 December 2019, sold any investment properties at a huge profit in comparison with the value on the 31 December 2019 Balance Sheet.

Noting your stating that you have received no previous papers (until the recent accountant’s letter) one would have expected the company (whether directly or via the accountant or outside solicitor) to have explained, when its accountant wrote to your mother recently, precisely WHY they have failed, over countless years, to send to you (as the legislation requires) the Financial Statements and Notices of Annual General Meetings each year. The fact that a director/shareholder of the company is a solicitor and the further fact that, even from the briefest of inspection of previous Financial Statements, different accountants have acted (at least one of which is of some stature) is extremely disturbing – it may simply be rank incompetence, or may conceivably be something more sinister.

You advised that (presumably in the letter from the accountant) the company expected the shareholder to give back his share, upon retirement from the company – it is frankly bewildering that they have a record of such event 38 years ago but have been unaware of their aforementioned obligations in relation to basic Company Law, including re sending Financial Statements and AGM Minutes (for the years since your father’s death, and possibly throughout your late father’s ownership of the share) to all its shareholders.

[I mentioned, in my last post, that, from inspection of the Financial Statements for one particular year, Dividends are shown as having been paid - taking at face value your assurance that no Dividends were received on the one share, and whilst the amount at issue would be minimal, it again reinforces the point that the company has failed in its obligations in relation to the payment of Dividends].

I emphasise again that this may be a case of ONLY rank incompetence, but you are certainly entitled to a full explanation. Whilst the owner of less than 5% of a company’s shares has extremely limited rights (I would recommend your spending an hour, Googling “Rights of Minority Shareholders”, to obtain an overview) the failure of the company to comply with its legal obligations remains a matter of huge concern.

I acknowledge again that there is no certainty that pursuing this matter will result in your achieving anything more than a nominal amount for the share – that, however, is simply not the point – as long as there remains a possibility, albeit small, that you have an entitlement to a substantially larger figure, then, even in “normal” circumstances, it is right and proper for you to pursue the matter (the fact that, in THIS particular case, the company has acted with gross negligence, simply adds to my concerns, and thus makes it IMHO all the more important for you to adopt a robust investigative approach).

In intending no offence, it is difficult to guide you, at this early stage, in how PRECISELY you should proceed from hereon in, and you would be well advised to obtain professional advice from a company law solicitor, for an initial (free of charge or nominal fee) consultation to ascertain the “best way forward”. Prior to so doing, and as a “starter for 10”, I would suggest that you ask the company (in a formal letter sent to its Registered Office) why it has neglected to comply with Companies Act legislation for countless years, and to fully “rectify all such failures forthwith in relation to Financial Statements, Dividends and any other areas in which the company has failed to comply with all legislation in respect of UK companies”.

Basil.

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Replying to fawltybasil2575:
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By Toby Tucker
20th Nov 2020 12:23

This is great advice, thank you very much. I will do as you suggest. I also spoke yesterday to a Corporate Finance expert at a local firm of Chartered Accountants and her advice was basically the same as yours.

I’ll let you know what happens!

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Replying to Toby Tucker:
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By lionofludesch
20th Nov 2020 12:35

Toby Tucker wrote:

I’ll let you know what happens!

Good.

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Replying to Toby Tucker:
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By Youareatit
20th Nov 2020 13:08

[quote=Toby Tucker]

. I also spoke yesterday to a Corporate Finance expert at a local firm of Chartered Accountants and her advice was basically the same as yours.

Would have been useful if you had provided that update yesterday and saved Basil from spending his precious time to provide you with free help when he could instead have been helping fee paying clients. But it appears folk on here are putting more effort, time and expense into this than you are.

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Replying to Youareatit:
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By Toby Tucker
20th Nov 2020 13:36

I’m sorry, I really appreciate Basil’s time and advice. I have taken that advice and written a letter using the wording he recommended. He, and others, have been extremely helpful. I am complete novice at this and didn’t know who to ask. I had contacted a friend of a friend at a firm before I found this forum. She just happened to call me yesterday. She only repeated what I had already learned here.

I certainly have no intention of wasting people’s time.

Sarah

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By fawltybasil2575
20th Nov 2020 21:56

@ Toby Tucker (OP).

Many thanks for your update (your post at 12.23 today).

I am extremely pleased that you have obtained informal agreement (to my approach) from a “Corporate Finance” accountant.

I was, when posting previously, conscious of the dangers of providing too much detail, for the recommended approach, given the possibility (albeit slim) that (since the name of the company has been shown above) the company accountant (and/or, albeit less likely, the company itself) might be an AWEB member.

Please bear this point in mind when posting again – feel free to “PM” me if a future OPEN post, on this thread, could prejudice your enquiries.

Basil.

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