Valuing a departing owner's share of an NDIS provider

Not automatically: it depends on the basis of value the shareholders agreement sets. A clause that prices the exit as a proportion of the value of the whole company gives half, by its terms. A clause that refers to the market value of the shares opens the question, because a 50 per cent holding cannot control the provider on its own, even though it can block the other holder. HPNA then reasons the answer from the deadlock and pre-emption rights, the distribution history and who could realistically buy the parcel, and states the conclusion with reasons rather than applying a rule of thumb. Which reading of your clause applies is a question for your lawyer.

Typically yes, where the exit is a transfer of shares and the entity keeps trading. The NDIS Commission states that a registration is linked to a single ABN and cannot be moved to a different ABN, so the company, its ABN and its registration continue when one shareholder sells to another. The Commission must still be notified of the change of ownership as soon as possible and of any change to key personnel, and from 1 July 2026 a condition audit must start within 3 months where the provider holds a registration group requiring certification and the change causes a significant change to the organisation or its governance. Whether a transfer between existing owners triggers that audit should be confirmed with the Commission or your lawyer. Moving the business to a new entity needs a new registration application.

As a cost, at the market salary of whoever replaces them, and then as a risk. Normalisation charges a market salary for every role the departing owner performs, which in a small provider often spans service delivery, rostering, incident management and claiming. The valuation then asks which participants and support coordinator relationships would follow that person, removes the revenue that would not survive their departure, and reflects the remaining exposure in the capitalisation multiple. Taxation Ruling TR 1999/16 describes the goodwill that emanates from a sole practitioner's personality, reputation and skills as not transferable, while other sources of goodwill continue to draw custom. The evidence is participant and referrer data, not assertion.

Usually separately from the price of the shares. A shareholder loan is a debt the company owes you, or you owe the company. It is typically dealt with at completion, usually at face value, and is not folded into goodwill. Whether it is repaid, set off against the price or left in place is settled in the exit documents, so confirm the treatment with your accountant and lawyer. HPNA reconstructs each owner's loan account, drawings and unpaid distributions to the valuation date, because personal money may have funded payroll while claims were outstanding and the accounts may not show who is owed what. The equity value of the shares is then struck after those balances are dealt with. How any repayment is taxed, and whether a dividend can lawfully be paid to fund it, are also matters for those advisers.

The constitution or trust deed is read first. Where it is silent on value, the exit becomes a negotiation, and the parties typically agree the basis of value, the valuation date, who appoints the valuer and whether the conclusion binds them, and may record those points in a written protocol before the valuer is instructed. Where nothing can be agreed, sections 232 and 233 of the Corporations Act 2001 allow a court to make orders, including an order for the purchase of shares, where the conduct of the company's affairs is contrary to the interests of the members as a whole, or oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member. That is a legal path, and once it is taken the valuation is prepared as an expert report for a shareholder dispute. Legal advice is required.

The date the agreement nominates, which is commonly the date notice is given, a month end or the last balance date. For an NDIS provider the choice carries more weight than usual, because pricing, plan rules and registration obligations change on published dates. The Department of Health, Disability and Ageing states that budget allocations for social, economic and community participation supports reduce by 50 per cent from 1 October 2026 for new plans and reassessments, so a provider valued either side of that step can properly show a different figure. The report states which settings applied at the date and how a known dated change was treated.

Often, and it is efficient to value the whole provider once and price both the departing parcel and the incoming one from it. The two prices are not automatically the same per share, because the incoming holder may receive different rights, a different class of share or a different loan arrangement, and the agreement may fix a different basis for entry and exit. HPNA states the basis for each and reconciles them. See internal transaction valuations.

It does not change what the parcel is worth; it changes what the continuing owners can pay and when. The remaining shareholders may buy the shares personally, the company may buy them back, or the company may assist the purchase. The two company routes carry their own requirements under the Corporations Act 2001, including the share buy-back procedures that follow section 257A and the limits section 260A places on financial assistance. Deferred instalments, or a retention against a restraint or handover period, may be used because claims cash lags delivery. Where the price is deferred, the valuation and the payment terms are set out separately so any allowance for deferral is visible. The mechanism and its tax consequences should be settled with your accountant and lawyer.