By Bruce McGechan, CVA — Fealty Business Valuations · Last reviewed 16 September 2026
You need a professional business valuation when someone who didn’t choose the valuer has to accept the number: a co-shareholder, a former partner, a bank, a court or IRD. If the only person relying on the number is you, you probably don’t. A calculator or a broker’s appraisal will tell you what you want to know for little or nothing.
This page sorts the common situations so you can find yours and go straight to the article that deals with it. What each kind of report costs is in how much a business valuation costs in NZ.
Ask one question. Will somebody with their own adviser, and their own interest in the answer, have to rely on this figure?
If yes, the number has to survive their adviser’s reading, and a back-of-envelope figure won’t. I’ve explained why in business valuation vs broker appraisal.
Internal transaction: selling shares to a co-owner, manager or family member.
Who has to accept the number: the buyer, and often their bank.
Shareholder dispute. Who has to accept the number: the other shareholder, a mediator, or the High Court under s 174 of the Companies Act 1993.
Relationship property. Who has to accept the number: your former partner, their lawyer and possibly the Family Court.
Death or incapacity of a shareholder. Who has to accept the number: the estate, and the shareholders buying the shares.
Tax and restructures. Who has to accept the number: IRD, if the transfer price is ever questioned.
Finance and insurance. Who has to accept the number: the bank lending on a buyout; the insurer setting buy-sell cover.
Other litigation. Who has to accept the number: the court, through an expert bound by the High Court Rules code of conduct.
Employee share schemes. Who has to accept the number: IRD.
Employee share schemes are one place an outside valuer is optional. IRD’s Commissioner’s Statement CS 24/01 accepts an independent valuation, a recent arm’s-length transaction, or an internal valuation backed by detailed documentation and board approval, on the conditions set out in the statement.
For tax and restructures, start with your tax adviser. If they need a figure that will stand up at market value, that’s the point to bring in a valuer.
If you’re curious what the business is worth, you don’t need me. The same goes if you’re planning five years out, or sense-checking whether a sale is worth pursuing before you talk to anyone.
If you’re selling to a stranger on the open market through a broker, a broker appraisal and a good broker may be all the job needs.
For all of these, a free calculator or valuation software gives you a directional number and shows you what drives it. I’ve listed options in the software section of the cost article. Spend money on a valuation when a trigger fires, or when the rough number tells you something worth acting on.
Most triggers arrive without warning. A death, a falling-out or a separation comes on its own schedule, and the valuation is then done under pressure, with each side already attached to a number.
Late valuations are also harder to do. Relationship property is officially valued at the hearing date under s 2G of the Property (Relationships) Act 1976 (but the court will likely allow a ‘most recent date’), and a buy-sell clause may fix a date that’s already months behind you. Rebuilding the business as it stood on a past date, from accounts that weren’t closed off at the time, is slower work than valuing it as it is today.
A valuation done before anyone has a stake settles the method, the standard of value and the level of value while everyone is still friendly. When a trigger fires, the argument is about updating a figure. That’s a far smaller argument than choosing one.
If you’re planning a handover, the case for starting two or three years out is in independent valuation for succession planning. For co-owners, the place to lock the method in is the buy-sell clause of your shareholders’ agreement, covered in why buy/sell agreements fail without independent valuation.
– Selling shares to a co-owner, manager or family member: what is a fair price for an internal business sale?
– A buyout triggered by death, retirement or a shareholder leaving: how a shareholder buyout valuation works
– A bank-funded management buyout: the management buyout process in NZ
– A dispute or relationship property matter: dispute and relationship property valuations
– Choosing between a broker appraisal and a valuation: business valuation vs broker appraisal
– You know you need one and you’re comparing quotes: fixed fee or time and materials?
Do I legally need a business valuation to sell shares in NZ? Generally the parties can agree any price they like. Your shareholders’ agreement or constitution may require a valuation, though, and a bank or IRD may expect one, so check those before assuming you’re free to skip it.
Can I use my accountant’s figure for a shareholder buyout? If both shareholders accept it, yes. The trouble starts when one doesn’t, because an accountant who acts for the company or for one shareholder is easy for the other side to question on independence.
Do I need a valuation for relationship property? If the business or shares are in the property pool and you and your former partner can’t agree their value, almost certainly.
Does IRD require a valuation when shares change hands? It depends on the transaction. Where the tax result turns on the value, you need a market value you can support; for employee share schemes it has published the acceptable ways to reach one in CS 24/01. Your tax adviser can tell you which rules apply.
How often should a business be valued? When a trigger fires, and at each tranche of a staged handover. Between those, the shareholders’ agreement should say how often the buy-sell figure is refreshed, so the number on file doesn’t go stale.
Ring or email me and I’ll tell you, including when the answer is that you don’t need a valuation. If you do, the fixed fees are on the pricing page.
Sources: Companies Act 1993, s 174; Property (Relationships) Act 1976, s 2G; High Court Rules 2016, Schedule 4; Inland Revenue, Commissioner’s Statement CS 24/01 (31 July 2024).
This article is published for general information. It isn’t legal, tax or financial advice.
About the Author
Bruce McGechan, CVA — Fealty Business Valuations
Bruce McGechan is a Certified Valuation Analyst (CVA), credentialled by the National Association of Certified Valuators and Analysts (NACVA), and a Certified M&A Advisor. He has valued 90 privately held New Zealand businesses across many sectors. Based in Palmerston North and working nationwide, he prepares independent valuations for shareholder buyouts, succession and pre-sale planning, and relationship property and shareholder disputes. His work applies NACVA professional standards to New Zealand conditions — local transaction evidence, NZ tax settings, and the thin-market realities of owner-operated and mid-market companies.
Talk to Bruce: 021-245-8881