Founder and shareholder transfers
Founder and shareholder share transfers
We value the shares involved when a founder leaves, when founders swap or buy back shares, or when shares move to a holding company or family trust.
- Valued on the basis your agreement defines, where it defines one
- Where tax needs market value too, the report states each separately
- Signed by a suitably qualified business valuer at Valuation Group
From $1,995 + GST
Delivery: agreed before commencement. Delivery time starts once payment and all required information have been received.
Get a scope and fixed fee
Tell us what needs valuing and why. We will come back to you with scope and fee before any work begins.
- Part of Valuation GroupValuation Group Pty Ltd, ABN 48 702 469 252
- Signed report plus the company’s DCF modelBoth start-up tiers include the model
- Fixed, published feesScope and fee agreed before we start
- Clear reasoning, cited sourcesSourced to the ATO and legislation
What we value, and on what basis
- A founder or shareholder transfer
- Where the constitution or shareholders' agreement defines the basis (for example a formula price or a defined fair value with or without discounts)
- The whole company
- MethodThe method or methods the evidence supports
- The signed valuation and the company’s DCF model
Basis of value and unit of value
- Basis of value
- Where the constitution or shareholders' agreement defines the basis (for example a formula price or a defined fair value with or without discounts), we value on that basis; where the transfer is assessed for tax, market value in its ordinary meaning applies, which the tax law can substitute for the contract price where the parties do not deal at arm's length 1 2. If both are needed, the report states each separately.
- Unit of value
- The whole company, one class of shares, or a specific parcel, depending on what the transfer actually involves
A founder or shareholder share transfer is any change of hands in an existing company's shares between people already involved with it: a departing founder being bought out, shares moving between founders, or a founder's own shares moving into a holding company or family trust. In our view, the constitution or shareholders' agreement usually sets the mechanics and often the price, for example a fixed formula, a defined "fair value" with or without discounts, or a bad leaver discount. Where your agreement defines that basis, we value on it as the clause requires; where the transfer is instead assessed for tax, we value at market value in its ordinary meaning, which the tax law can substitute for the contract price where the parties do not deal at arm's length 1 2. If both are needed, our report states each basis separately and names whether the unit in question is the whole company, one class, or a specific parcel; how the transaction is then documented and taxed is worked out between the parties and their own lawyer and accountant.
01Start here
What counts as a founder or shareholder share transfer?
Each of these is a transfer between people, or into an entity a person controls. Where the change instead reorganises the operating business itself, see how this differs from a change of structure below.
Events this service covers
- A departing founder's shares being bought back under a leaver clause, whether classified as a good leaver or a bad leaver
- A transfer of shares between founders, for example rebalancing after a change in roles or resolving a disagreement
- A minority shareholder buyback under a buy-sell, pre-emption or exit clause in the shareholders' agreement
- A founder's own shares moving into a holding company they control
- A founder's own shares moving into a family trust or another related entity
- Valuing a specific class of shares, or a specific parcel, where the transfer involves only some of the company's shares rather than the whole thing
02Vesting
How does reverse vesting affect what a departing founder keeps?
Founder shareholdings are commonly subject to reverse vesting: shares are issued up front, but remain subject to a vesting schedule, often with an initial cliff, set out in the shareholders' agreement. Judgement: how unvested shares are dealt with on a departure depends on the agreement, but a company cannot simply hold onto a departing founder's unvested shares unpriced: an Australian company must not otherwise acquire shares in itself, outside a buy back or one of a small number of other permitted cases 3. In our experience the agreement commonly deals with this by having the company buy the unvested shares back for a nominal price and cancel them, or by transferring them to another holder or a nominee under the agreement's own mechanism. Even at a nominal price, the tax position on that step may turn on market value rather than the price paid, so we confirm with your accountant whether the unvested shares need a value of their own as well as the vested ones. Confirming which shares are actually vested at the departure date, and on what timetable, is one of the first steps in scoping the valuation.
The detail and sources
- Good leaver
Judgement: exactly which circumstances qualify as a good leaver, and what price applies to a good leaver's vested shares, depends entirely on how the individual agreement is drafted; there is no standard definition. Commonly excluded from any penalty: death, permanent incapacity, redundancy, retirement, or a resignation the board agrees to on reasonable terms.
- Bad leaver
Judgement: agreements vary widely in how they price a bad leaver's shares, from the same basis as a good leaver to a reduced price under whichever formula the document specifies; we read the clause rather than assume a standard treatment. Commonly treated less favourably: a resignation without the board's agreement, dismissal for cause, or a breach of restrictive covenants.
03Price
What sets the price: your agreement, or the market?
Judgement: which formula in the agreement applies, and to which parcel, follows from the leaver classification and vesting status covered above. Where that clause sets the price, for example a fixed formula or a defined "fair value" with or without adjustments, we value on that basis, because that is what the clause requires; that "fair value" is not automatically the same figure as market value for tax, and fair value under the accounting standard AASB 13 is a third, different figure again 1; we offer that financial-reporting fair value too, scoped and quoted separately. Where the transfer is instead, or also, assessed for tax, market value in its ordinary meaning applies as set out in the short answer above, and our report states each basis separately where both are needed.
04Unit of value
What is being valued: the whole company, a class, or a parcel?
A founder or shareholder transfer rarely calls for a value of the whole company. More often, what needs a value is one class of shares, where preference rights or other class terms exist, or a specific parcel, where only some of a founder's shares are moving. We name which of these applies before starting work, and we do not publish a minority discount or marketability discount percentage on this page: the reasoning behind any such adjustment depends on the specific rights, restrictions and agreement in front of us, not a general figure. Where more than one class of shares exists, our guide on ordinary versus preference shares explains how value gets allocated across classes before a parcel or class figure can be reached.
The detail and sources
A departing co-founder, illustrated with fictional numbers
Fictional numbers. Not market evidence.
Ana and Ben incorporate Fictional Startup Pty Ltd with 10,000,000 ordinary shares: 6,000,000 to Ana and 4,000,000 to Ben, both subject to a four year vesting schedule with a one year cliff under their shareholders' agreement. After 18 months, Ben resigns to take a role elsewhere. Under this fictional agreement, an ordinary resignation without cause, on reasonable terms, is classified as a good leaver event.
Under the vesting schedule, 2,500,000 of Ben's 4,000,000 shares are unvested at the departure date. This fictional agreement deals with unvested shares on a leaver by having the company buy them back for a nominal amount and cancel them, so they do not remain on issue. Ben's remaining 1,500,000 shares are vested, and the agreement's leaver mechanic points to a fair value formula the founders agreed at incorporation for buying those back.
The formula price may not settle the tax position on either parcel: buy backs carry their own tax rules, which Ben's and the company's accountants will apply. We are engaged to establish the market value of the 1,500,000 vested shares at the departure date; whether the buyback actually proceeds at the formula price, at market value, or at some other figure the parties agree, and how any gap between them is treated, is a contractual and tax question for Ben's and the company's own advisers.
Illustrative. Fictional numbers.
Fictional numbers. Not market evidence. All 4,000,000 of Ben's shares (1,500,000 vested and bought back at the formula price, 2,500,000 unvested and bought back for a nominal amount) are cancelled on registration of the transfer to the company [S024]; total shares on issue fall from 10,000,000 to 6,000,000.
05Scope
How does this differ from a change of company structure?
This page covers a transfer between people, or between a person and an entity they personally control, such as their own holding company or family trust. It does not cover a change to the operating company's own structure, for example moving the business itself between entities, a group reorganisation, or a rollover of the operating business: that is a different question with different rules, and it belongs on tax and restructure valuations. Judgement: we draw the line at a founder moving their own shareholding into their own entity being a founder transfer, and the operating company itself changing hands between related entities as part of a wider reorganisation being a restructure, though the line is not always sharp. Moving your shares into your own company or trust can also carry rollover or other tax consequences your accountant should check first; where a rollover may be in play, see tax and restructure valuations as well.
06Related work
How does this relate to ESS valuations and to share class or parcel work?
Two related questions sometimes arrive alongside a transfer, and each has its own page built for it. If shares or options are being granted to an employee under an employee share scheme, rather than transferred between people who already hold shares, that falls under Division 83A, where the start-up concession test uses the market value of an ordinary share 4 and the LI 2025/19 safe harbour may be available for that test only 5 6. Founder shares issued with vesting or forfeiture conditions in connection with employment can sometimes be ESS interests too, so if employment is part of the picture, see employee share scheme valuations as well. If the question is really about how value splits across an existing cap table, where one class carries a liquidation preference or other rights different from another, our guide on ordinary versus preference shares covers that allocation step, whether or not a transfer is happening at the same time.
07What we need
What information do we need?
We ask for this after engagement, through your private matter link, never a form on this site.
The detail and sources
Documents we typically need
- Constitution and shareholders' agreement, including any valuation, transfer, pre-emption, leaver and expert determination clauses
- ASIC company extract, full share register and fully diluted cap table, every class, option and convertible instrument
- The vesting schedule and grant documentation for the founder whose shares are transferring
- Board or shareholder resolutions, or correspondence, recording the departure or the transfer
- Terms and pricing of the company's most recent capital raise, if any, and any prior secondary transfers and their prices
- Financial statements for the last two or three years, or since incorporation, and current management accounts
08Fees
What does the engagement include and what does it cost?
APES 225 Valuation Services distinguishes valuation engagements, limited scope valuation engagements and calculation engagements 7. Each Simple or Standard start-up valuation is a valuation engagement, as described in the APES 225 guidelines we follow.
Simple start-up valuation
A company with one share class and no SAFEs, convertible notes or ESS.
$1,995 + GST
Delivery: agreed before commencement. Delivery time starts once payment and all required information have been received.
- The signed valuation
- The company’s DCF model
- A valuation engagement, as described in the APES 225 guidelines we follow
Request a valuationNothing starts until you accept it.
Standard start-up valuation
ESS work, SAFEs or convertible notes, several share classes, or option-pool modelling.
$3,495 + GST
Delivery: agreed before commencement. Delivery time starts once payment and all required information have been received.
- The signed valuation
- The company’s DCF model
- A valuation engagement, as described in the APES 225 guidelines we follow
Request a valuationNothing starts until you accept it.
Dispute or court expert report
A start-up matter in dispute or heading to court.
$4,495 + GST
Delivery: agreed before commencement. Delivery time starts once payment and all required information have been received.
- The expert report
- Prepared for the court process
- A declaration of independence and conflicts
Request a valuationNothing starts until you accept it.
Add-ons
Retrospective valuation date+$495 + GST per date
Additional entity+$795 + GST per additional entity
Delivery time starts once payment and all required information have been received.
The detail and sources
Founder and shareholder transfer work does not carry one flat fee: the tier follows the company's structure and the purpose of the transfer, not this page. A transfer in a company with one share class and no SAFEs, convertible notes or ESS is typically the Simple start-up valuation, $1,995 + GST. A transfer that involves ESS work, SAFEs or notes, several share classes, or option-pool modelling is the Standard start-up valuation, $3,495 + GST. Both include the signed valuation and the company's DCF model, delivery agreed before commencement. A transfer that is in dispute or heading to court is the dispute or court expert report, $4,495 + GST, delivery agreed before commencement. Delivery time starts once payment and all required information have been received. For a founder or shareholder transfer we agree the delivery date with you before work begins, because scope depends on how many classes and instruments are involved, whether the valuation date is current or retrospective, and how much of the paperwork above is ready. A retrospective valuation date adds $495 + GST per date, and each additional entity in the group adds $795 + GST; in our view, a holding company or trust receiving the shares counts as an additional entity only if it is itself part of what we value, which we confirm with you before quoting. Full tier details, inclusions and delivery basis sit on pricing.
We prepare this valuation for the company, its board or its advisers. We do not tell a departing founder, a remaining founder or an incoming holder whether to accept, exercise, buy or sell at any particular price; that decision, and its contractual and tax consequences, is for the parties and their own lawyer and accountant.
09FAQ
Frequently asked questions
Does the shareholders' agreement's buyback formula settle the tax outcome too?
Not by itself. Which formula applies, and to which parcel, follows from the leaver classification and vesting status covered above, and that is a contractual question for your lawyer to confirm. Tax law can still look past the agreed price: where the parties did not deal with each other at arm's length, which may be the case where a founder transfers shares to a co-founder or to their own family trust at a formula price, tax may be assessed on market value rather than the contract price 2. A buy back is different: its capital proceeds are worked out under separate rules (Division 16K), which your accountant applies 2; we establish the market value that the agreement or the tax question needs.
Are a departing founder's unvested shares part of what gets valued?
Often, yes, alongside the vested shares. In our view, unvested shares are commonly bought back for a nominal price and cancelled, or transferred to another holder under the agreement, rather than simply staying with the company unpriced (an Australian company cannot generally hold its own shares outside a buy back 3). Even a nominal price can raise its own tax question, so we confirm with your accountant whether the unvested shares need a value too.
Do you value the whole company, or just the shares changing hands?
We value what the transfer actually involves, which is usually a class or a parcel, not automatically a pro rata share of the whole company. Our guide on ordinary versus preference shares explains how value is allocated once more than one class exists.
We're moving founder shares into a family trust. Is that this page, or the restructure page?
If it is a founder's own shares moving into an entity they personally control, for their own succession or asset protection planning, this page covers it, though moving shares into your own company or trust can carry rollover or other tax consequences your accountant should check first. If the transfer instead reorganises the operating company itself, for example into a new holding structure above it, see tax and restructure valuations.
We prepare this for the company, its board or its advisers, not as advice to a departing founder, a remaining founder or an incoming holder on whether to buy, sell, accept or exercise.
Start-Up Valuations
Founder Share Transfers is a service of Start-Up Valuations, a division of Valuation Group Pty Ltd, for Australian founders, boards, accountants and lawyers handling a departure, a buyback, or a transfer to a holding company or trust. In our view, what makes this different from a generic share sale is that the price is often not a clean arm's length negotiation: it is usually set by a clause the founders agreed to years before anyone was leaving, and by a vesting schedule that decides which shares are even still theirs to sell.
Sources (7)
- Market valuation for tax purposes (Guide). Australian Taxation Office. Current at February 2025. Accessed 27 Sep 2026. S009 abc
- Income Tax Assessment Act 1997 (Compilation No. 254), sections 116-20 and 116-30. Federal Register of Legislation (Office of Parliamentary Counsel). Compilation start date 14 October 2024, includes Act No. 38, 2024. Accessed 27 Sep 2026. S025 abcd
- Corporations Act 2001 (Compilation No. 148), sections 257H and 259A. Federal Register of Legislation (Office of Parliamentary Counsel). Compilation date 27 August 2026, includes Act No. 69, 2026. Accessed 27 Sep 2026. S024 ab
- Income Tax Assessment Act 1997, section 83A-33. Commonwealth (text via ATO Legal Database). Current text as displayed 27 Sep 2026; inserted by No 105 of 2015. Accessed 27 Sep 2026. S006
- LI 2025/19 Legislative Instrument. Australian Taxation Office; Federal Register of Legislation. Made 9 Sep 2025; registered 11 Sep 2025 (F2025L01085); commenced 1 Oct 2025. Accessed 27 Sep 2026. S003
- LI 2025/19, Explanatory Statement. Australian Taxation Office. 9 Sep 2025. Accessed 27 Sep 2026. S004
- Valuation Services (APES 225, APES GN 20, APES GN 21). Accounting Professional & Ethical Standards Board (APESB). APES 225 (2024) effective 1 Jan 2025; APES GN 20 (2025). Accessed 27 Sep 2026. S014
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