Registered Valuer for Insolvency & Bankruptcy Services.

The Companies Act, 2013 (Act for short) has introduced the concept of Registered Valuer. As per Section 247 of the Act it is mandatory that wherever the valuation is required with any stocks, property, security, debentures, shares and/or goodwill or any other assets or the net worth of company and/or the liabilities by and under the provisions of the Act, A registered valuer should do the valuation.  An Audit Committee has to appoint the registered valuer and in its absence the Board of directors.

With effect from February 1, 2019 only entities registered as valuers with the IBBI can carry out valuation of assets under the insolvency law. The Insolvency and Bankruptcy Board of India (IBBI) is responsible for the registration of valuers. a key factor for an "informed decision making" under the Insolvency and Bankruptcy Code (IBC) is valuation of Assists.

When does a valuation is required by a registered valuer under the Act?

Any stocks, property, security, debentures, shares and/or goodwill or any other assets or the net worth of company and/or the liabilities by and under the provisions of the Act 

In the Act, specific mention about valuation by registered valuer has been made in the following Sections:

Section 62(1)(c) – Further issue of share capital, other than Rights Issue and Issue under a Scheme of Employee Stock Option.

Section 192(2) – Non cash transaction of the directors involved

Section 230(2) – in case of a scheme of compromise or arrangement with members or Creditors

Section 236(2) – Purchase of minority shareholding

Section 281(1)(a) proviso – Submission of report by company liquidator

Section 305(2)(d) – Declaration of solvency in case of proposal to wind up voluntarily

Section 319(3)(b) – Power of Company Liquidator to accept shares, as consideration for sale of any property of the company.

Duties of Registered Valuer [Section 247(2)]:

(a) to make an impartial, true and fair valuation of any/main assets which may be required to be valued;

(b) exercise due diligence while performing the functions as valuer;

(c) valuations are to be made in accordance with such rules as may be prescribed

(d) Not to undertake valuation of any assets in which he or she has a direct or indirect interest or becomes so interested at any time during or after the valuation of assets.