What can I do if my business partner and I can’t agree what the business is worth?

Two partners can both be reasonable and still land on different numbers. The gap may come from inputs and method rather than bad faith, so pinning down where the figures diverge is the first practical step. Only after that does it make sense to bring in a third party or a court. What follows assumes a corporation; a partnership is governed by its own agreement and provincial partnership law.

Check what you already agreed

Read the shareholder or partnership agreement before anything else. Look for a formula, a named valuator, a buy-sell clause or a dispute process such as mediation or arbitration. If one exists, it may decide how value is set, and arguing for a different method could conflict with it. Ask a lawyer whether a clause binds both of you.

Find out why the numbers differ

BDC describes asset-based valuation, market multiples and discounted cash flow as separate approaches, and notes that buyers examine historical revenue, margins, EBITDA and asset values. Put both valuations side by side and mark where they differ: the method, the earnings used, any adjustments, the multiple or discount rate. The disagreement may narrow to one or two inputs you can test against the accounts and the add-backs.

Use one independent valuator, then the statutes

Agree in writing who the valuator is, what date and basis of value they use, what documents they get and whether the result binds you. If the company is federal and a dissent reaches court on an application under s.190(15) or (16) of the CBCA, s.190(20) has the court fix fair value, and s.190(21) lets it appoint appraisers. Under s.241(3)(f) the court may, on an oppression application, direct the corporation, subject to s.241(6), or any other person to purchase a security holder’s securities. Ontario’s OBCA has parallel provisions in ss.185 and 248.