Market value evidence for start-up tax restructures

The unit of value changes with the transaction. Interposing a holding company ahead of a raise (see below) values the equity in the existing trading company, and where the cap table carries more than one class, preference shares, an option pool, or unconverted SAFEs or convertible notes, the value of each class or each member's parcel, not an equal per-share split. Moving IP values that asset on its own. Converting a sole-trader or trust structure into a company values each asset that moves, for example goodwill, IP, or plant, rather than the business as a single figure. We name the unit of value before starting work. For how a method is chosen once the basis and unit are set, see our guide on how to value a startup.

One roll-over that can apply lets members who together own all the shares or units in a company or unit trust dispose of all of them to a new interposed company, in exchange only for shares in that interposed company, where the further requirements in Subdivision 615-B are also satisfied ³. It does not cover a discretionary (family) trust: converting one into a structure this roll-over can apply to is a separate question for your accountant, and early start-up structures are sometimes set up as a discretionary trust. Whether this roll-over, or another mechanism, fits your group is a question for your accountant or tax agent.

Where the group has raised capital recently, that round can be relevant evidence for the swap-date value, though it prices a specific class on a specific date rather than settling the figure on its own: see our guide on what a recent capital raise does and does not tell you about value.

Either way, we value the existing trading company's equity at the swap date, and where more than one class of shares exists, each class or each member's parcel, rather than a single whole-of-company figure. In our view, where the cap table has more than one class, class-by-class value evidence at the swap date helps the board and its advisers confirm that the relative position of each class is unchanged by the interposition.

Judgement: a scaling, venture-backed group often sits outside this roll-over, commonly because turnover has passed the threshold, or the transaction is a step toward a future sale rather than a genuine restructure of an ongoing business. Whether it applies, including the genuine-restructure and ultimate-economic-ownership questions, is a fact-heavy call for your accountant or tax agent. Our role, where it might apply, is the market value evidence behind the ownership and asset conditions, at the relevant date, not an opinion on eligibility. For the mechanics most venture-backed start-up groups actually use, see interposing a holding company and moving IP above.

Which of our Startup fee tiers applies follows the company's structure and the purpose of the valuation, not this page. A holding company interposition or IP transfer in a company with one share class and no SAFEs, convertible notes or ESS may be our Simple start-up valuation, $1,995 + GST. Where the group carries several share classes, SAFEs or notes, an option pool, or ESS, it is our Standard start-up valuation, $3,495 + GST. Both tiers include the signed valuation and the company's DCF model. A restructure matter in dispute or heading to court is the expert report, $4,495 + GST. Each additional entity adds $795 + GST, and each retrospective valuation date adds $495 + GST; a restructure almost always involves more than one entity, so most engagements carry at least one entity add-on. Delivery is agreed before commencement. Delivery time starts once payment and all required information have been received. Full details, including what each tier covers, sit on pricing.