Registered Valuer under Companies Act, 2013

Last Updated On: Dec. 14, 2021, 11:09 p.m.
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REGISTERED VALUER AS PER COMPANIES ACT 2013

A person, who aspire to be a registered valuer, is required to possess certain qualifications and experience, obtain membership of a recognized organization of valuers and get itself registered as a valuer with IBBI. The RV Rules sets out in detail the eligibility criteria, educational qualifications (degree), experience, and procedure for registration of a valuer.

However, such valuer will not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during a period of three years prior to his appointment as valuer or three years after the valuation of assets was conducted by him.

 

What are the qualifications of registered valuers:

  • The registered valuer is responsible for any negligence or misconduct leading to disciplinary action by IBBI and regulatory penalties and fines.
  • For valuation of land & building, a registered valuer must be a graduate or post graduate in Civil engineering, architecture or town planning with minimum experience of 3 to 5 years
  • For valuation of plant & machinery, a registered valuer must be a graduate or post graduate in Electrical or Mechanic Engineering with minimum experience of 3 to 5 years
  • For valuation of securities or financial assets, a person must be a member of ICAI, ICSI or Institute of Cost Accountants of India or an MBA with specialization in Finance, with minimum experience of 3 years in the discipline after completing graduation

 

 

Provisions which requires valuation report from a registered valuer:

1. Rule 8 of Companies (Share Capital and Debentures) Rules, 2014 (Issuance of Equity Shares)

These rules apply to all companies except listed companies issuing equity shares to its employees or directors. The rule prescribes that the equity shares shall be issued at a price as a fair price giving justification for such valuation determined by a registered valuer. The value of the intellectual property or any other value additions, for which the equity shares have been issued to its employees or directors, has to be determined by a valuation report of a registered valuer. If the equity shares are issued for non-cash consideration, the value of that non-cash consideration must be based on a valuation report by the registered valuer. Also, if the equity shares are issued pursuant to the acquisition of an asset, the value of such asset also has to be determined based on a valuation report by a registered valuer.


2 Rule 16(1)(c) of Companies (Share Capital and Debentures) Rules, 2014 (Buy-Back of Shares)

When the shares of a company are not listed on a recognized stock exchange, the valuation of that shares are to be purchased has to be made by a registered valuer.

 

3. Rule 12(5) of the Companies (Prospectus and Allotment of Securities) Rules, 2014

Allotment of Shares in consideration besides Cash- In the case of securities if not are bonus shares allotted as fully or partly paid-up for consideration besides the cash, then e- form PAS-3 shall be attached to the copy of the contract and duly stamped. A report obtained from the registered valuer in respect of valuation of the consideration shall also be attached along with the contract.

 

4. 177 (4) (vi) Valuation of Assets with reference of Audit Committee

Valuation of undertakings or assets of the company, when it is necessary, it has to be done by registered valuer only.

 

5. Rule 2(c)(ix) and Rule 6(1) of Companies (Acceptance of Deposit) Rules, 2014

Valuation of Secured Debentures The Secured Debentures if valued by the Registered Valuer will be excluded from the definition of Deposits.
 

6. Section 230(2)(c)(v) and Section 230(3)

Valuation of shares, property and assets of the Company in need of compromise or arrangement. A valuation report regarding shares, assets or property, tangible and intangible, movable and immovable of the company, made by a Registered Valuer in case of a compromise or arrangement between members (such as in mergers) or with creditors (such as in corporate debt restructuring. That particular valuation report is required to be shared with Notice of creditors/ shareholders meeting– Under the scheme of compromise/Arrangement.

 

7. Section 192(2) Valuation of Assets acquired for a Consideration besides Cash

If a director of Company subsidiary or associate company or a person connected wants to acquire or acquires assets for consideration besides cash, from the company, then the value of the assets involved must be calculated by a registered valuer.

 

8. Section 232 (2)(d) and Section 232 (3)(h)(B) Valuation of Assets in case of the Merger and Amalgamation

The report of the Registered Valuer with regard to valuation has to be circulated for the meeting of creditors and members. The Valuation report is made by the tribunal for exit opportunity to the shareholders of transferor Company Under the scheme of Compromise/Arrangement in case the Transferor company is Listed Company and the Transferee-company is an unlisted Company.

 

9. Section 236(2) Valuations of Shares in case of purchase of Minority Shareholding

The acquirer, person or group of persons under sub-section (1) must offer to the minority shareholders of the company for buying the equity shares held by the shareholders at a price determined on the basis of valuation by the registered valuer. 11. Section 281(1)(a) Valuing assets for submission of report by the liquidator Valuation of Assets for submission of report by the liquidator in case of winding up is required to be done by Registered Valuer.

 



 



 

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