As per the recent Ministry of Corporate Affairs (“MCA”) notification with respect to Companies (Registered Valuers and Valuation) Rules, 2017, has notified Registration of Valuers for conducting the valuation under the Companies Act, 2013. It provides for registration of different category of valuers including eligibility requirements for qualifications and experience.
The valuers, who may be individuals or partnership entities or companies, would be required to be registered with the authority specified by the Central Government, i.e. Registered Valuers Organisations (RVOs) recognised by the authority under the Rules (RVO are Section 8 companies or Professional Institutes registered with Insolvency and Bankruptcy Board of India (IBBI).
Who can do valuation for Companies as per the Companies Act, 2013?
The following registered valuer can do valuation:
- Practicing Company Secretaries registered with IBBI;
- Practicing Chartered Accountant registered with IBBI;
- Practicing Cost Accountant registered with IBBI; and
- Any other person recognized for specific valuation as registered valuer by IBBI.
The eligibility norms for RVOs to be recognised have also been provided in the Rules.The functions of RVO includes internal governance structure which should provide for enforcement of a code of conduct on the registered valuers, training and conduct of educational courses for the valuation of specific asset classes for which the RVO concerned is recognised.
Valuation of specific asset classes includes:
- Land and Building;
- Plant and Machinery;and
- Securities or Financial Assets.
Before section 247 of the Companies Act, 2013 I.e. registered valuer came into effect, valuation was done by Independent Merchant Banker registered with SEBI or Independent Chartered Accountant in practice having minimum experience of 10 years.
As per recent MCA notification as on 23rd October, 2018 the powers of Central Government has been delegated to IBBI and it has been notified that the person who has been registered with IBBI as Register Valuer can only give Valuation Certificate.
Deadline until which valuation services are permitted to be rendered without registration with IBBI is 31st January, 2019.
Hence, the Valuation Report after 1st February, 2019 has to be obtained from Registered Valuer registered with IBBI only, however, if a valuation assignment has been accepted before 31st January 2019, it can be completed up to 30th April 2019.