Section 247 of the Companies Act, 2013 mandates that where a valuation is required in respect of any property, stocks, shares, debentures, securities, goodwill, or any other assets or net worth of a company or its liabilities, it shall be valued by a person registered as a valuer with a recognised valuer organisation and appointed by the audit committee or the board. The Registered Valuers and Valuation Rules, 2017 prescribe the eligibility and the registration process.
The Eligibility
An individual is eligible to be registered as a valuer if he is a valuer member of a registered valuers organisation, has the prescribed qualifications and experience, has passed the valuation examination within three years preceding the date of the application, is not a minor, has not been declared of unsound mind, and is not an undischarged bankrupt. The qualifications include a chartered accountant, company secretary, or cost accountant in whole-time practice, a merchant banker registered with SEBI, or a person with the prescribed educational background and experience.
The Asset Classes
The registration is asset-class specific. The asset classes are securities or financial assets, land and building, plant and machinery, and any other asset class that the IBBI may notify. The valuer must pass the valuation examination for the specific asset class, and the registration is granted for that class.
The IBBI Oversight
The IBBI is the valuation authority, and it grants and renews the recognition to the valuer organisations and the registration to the valuers. The IBBI monitors the compliance, and it can cancel the registration for misconduct or for the breach of the code of conduct. The valuer’s report is used in the NCLT schemes, the capital reduction, the buy-back, the preferential allotment, and the Section 236 squeeze-out.
The Appointment
The valuer must be appointed by the audit committee or the board, and the valuer must be independent of the company. The valuer must disclose any conflict of interest, and the report must comply with the valuation standards.
A technically sound valuation engagement selects a valuer with the correct asset-class registration, documents the independence, and ensures that the report complies with the standards.
Call to Action
Anuj Desai & Associates advises companies and registered valuers on the Section 247 eligibility and registration—from the asset-class examination and the IBBI registration to the appointment, the independence, and the valuation standards. If you need a registered valuer for a corporate action, we can help you select and instruct the valuer.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
Article 283