First Notes - 09 June 2017

First Notes - 09 June 2017

MCA issues draft Companies (Registered Valuers and Valuation) Rules, 2017

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Background

Section 247 of the Companies Act, 2013 (2013 Act) governs the provisions relating to the valuation by registered valuers under the 2013 Act. It requires that wherever valuation with respect to any property, stocks, shares, debentures, securities or goodwill or any other assets or net worth of a company or its liabilities is required to be made under the provisions of the 2013 Act, it should be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed. Such a registered valuer should be appointed by the audit committee or by the Board of Directors (in the absence of audit committee) of that company.

The registered valuer has been entrusted with various significant responsibilities under the 2013 Act. These are as follows:

  • Make an impartial, true and fair valuation of assets
  • Exercise due diligence while performing the functions as a valuer
  • Conduct valuation in accordance with the Rules as may be prescribed
  • Not to undertake valuation of any assets in which he/she has a direct or indirect interest or becomes so interested at any time during or after the valuation of assets.

New development

On 26 May 2017, the MCA has issued the draft Companies (Registered Valuers and Valuation) Rules, 2017 (Valuation Rules). The Valuation Rules provide detailed guidance on various aspects of a registered valuer.

Comments on the draft Valuation Rules could be submitted up to 27 June 2017.

This issue of First Notes provide an overview of the key requirements of the Valuation Rules.

To access the text of the Valuation Rules issued by the MCA, please click here.

 

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