Partner Buy-In and Buy-Out Valuation
A partner buy-in or buy-out valuation sets the price of an ownership interest when a partner joins or exits and the agreement does not fix a formula. FMV values the specific interest and applies the agreement's terms.
Signed by a credentialed analystFairMarketValue
Meridian Family Practice, LLP
At a glance
- Basis
- Interest-level value under the terms of the buy-sell or operating agreement
- Prepared by
- A credentialed FMV valuation analyst
- Deliverable
- Signed report (PDF)
- Used by
- Banks and lenders, accounting firms, financial advisors, attorneys
- Delivered to
- The ordering bank's or firm's vault and the client's vault
When it is needed
- A professional practice admitting a new partner or buying out a retiring one.
- A family business settling an exit between owners.
- An SBA owner buyout, where one existing owner remains and guarantees the loan.
What the report contains
- Interest-level value with control and marketability analysis
- Review of the buy-sell agreement's valuation terms
- A report prepared for review by counsel on both sides
Last updated October 24, 2026
The FMV Lender Standard
Included in every bank engagement at no additional cost.
Peer benchmark exhibit
The borrower against private companies of its size on margins, leverage, debt service coverage, and working capital.
Annual reassessment
Twelve months after the valuation, we re-run it on the borrower's latest financials and send credit administration an updated assessment for the annual review.
Public-record screen
Suits, liens, judgments, and bankruptcies on the business, flagged for follow-up.
Guaranty support
If SBA questions our valuation at guaranty purchase, we provide a support memo, the workfile, and time with your team or SBA reviewers.
Industry research
Industry analysis in each report, with research access for credit administration and loan review.
Who uses it
Standards and sources
- The buy-sell or operating agreement
- Standard of value and any defined terms
- Revenue Ruling 59-60
- Valuation factors
- SBA SOP 50 10 8.1, Appendix 15
- Owner buyout requirements, where SBA-financed
Documents we need
- Financial statements
- Partnership or operating agreement
- The buy-sell agreement
How an engagement works
Scope
We confirm the purpose, standard of value, valuation date, and addressee, then issue the engagement letter.
Intake
You or your client upload documents against a checklist. Open items stay visible until the file is complete.
Analysis
A credentialed analyst prepares the valuation and signs the conclusion.
Delivery
The signed PDF goes to your vault and your client's. We keep the workfile for later questions.
Partner buy-in or buy-out valuation questions
What is a partner buy-in or buy-out valuation?
A partner buy-in or buy-out valuation is an independent valuation of a specific ownership interest, prepared when a partner joins or exits a business and the governing agreement does not set a price formula. FairMarketValue (FMV) applies the agreement's standard of value and terms to the interest being transferred.
Are discounts applied to a minority partner's interest?
Discounts for lack of control and marketability apply only where the agreement's standard of value allows them. Many buy-sell agreements specify fair value or a pro rata share without discounts, so FMV reviews the agreement's valuation terms before concluding.
Can both partners rely on the same buy-out valuation?
Yes, where the agreement allows it. FMV writes the report so counsel for each side can review the same analysis and assumptions.
Does an SBA-financed owner buyout need a Quality of Earnings report?
No. Under SBA SOP 50 10 8.1, owner buyouts, where at least one existing owner remains and guarantees the loan, are exempt from the Quality of Earnings requirement. The independent valuation is still required and is addressed to the lender.
What documents does a buy-out valuation require?
A partner buy-in or buy-out valuation requires the company's financial statements, the partnership or operating agreement, and the buy-sell agreement.
How is the fee for a partner buy-in or buy-out valuation set?
FMV quotes the fee for a partner buy-in or buy-out valuation after reviewing the scope. The fee is fixed before work starts and does not depend on the conclusion of value.
Trust and reliability
SOC 2 Type II and ISO 27001 audits are underway. Our security program is documented in the FMV Trust Center.
Get a fixed-fee quote
Tell us the purpose, the company, and the valuation date. We confirm scope and quote a fixed fee before work begins.