Requirement of Valuation under Companies Act, 2013

Section 247 of the Companies Act, 2013 states that any property, stocks, shares, debentures, securities, goodwill, or any other assets or net worth of a company or its liabilities, shall be valued by a person having such qualifications and experience, registered as a valuer, and being a member of an organization recognized, in such manner, on such terms and conditions.

According to the 2013 Act, all valuations must be performed by a Registered Valuer, and the Registered Valuer for a company's valuation needs must be selected by the Audit Committee or, in its absence, by the Board of Directors.

What is the definition of valuation?

Valuation is the process of determining the market value of a firm or the worth of an asset. Business Valuations consultants analyze a company's growth rate, predicted future earnings, the value of its tangible and intangible assets, and the company's management when determining its worth.

The value of shares and other securities, as well as the worth of the firm and its assets, is determined through valuation. To arrive at the most accurate value, valuation consultants use a variety of methodologies. Valuation is utilized for more than just evaluating the market value of a company.

Advantages Of Valuation Services

Valuation is one of the most important services in business and for companies. Company Valuation under the Companies Act, 2013 helps us understand these benefits a little better and learn how to put these services into action.

  1. Provides useful information regarding the company's operations.
  2. Increased awareness of the company's resale worth.
  3. Stakeholders are reassured by valuation.

Requirement of Valuation

Under the Companies Act of 2013, any securities, stocks, property, debentures, shares, or goodwill, as well as any other assets or net worth of a company, or the company's liabilities, must be valued. The following sections of the Companies Act of 2013 require valuation:

  1. Section 62: Valuation for Future Share Capital Issues
  2. Section 192: Valuation of Assets Involved in Non-Cash Transactions with Directors
  3. Section 230/232: Valuation under a Compromise/Arrangement Agreement or a Corporate Debt Restructuring Agreement
  4. Section 236: Valuation for Minority Shareholding Purchase
  5. Section 260: Valuation of Shares and Assets for the Purpose of Determining the Reserve Price for the Company Administrator
  6. Section 281: Valuing assets in preparation for the Company Liquidator's report
  7. Section 305: Assets Report for Declaration of Solvency in the Event of Voluntary Dissolution
  8. Section 319: valuing any dissenting member's stake under the Company Liquidator's power to accept shares, etc., as consideration for the sale of the company's property

The Companies Act of 2013 lists these valuation rules.

What is the role of a Registered Valuer?

According to the Companies (Registered Valuer and Valuation) Rules, 2017, a registered valuer is an individual or entity who is registered as a valuer with the Insolvency and Bankruptcy Board of India (IBIBI).

The central government has designated IBBI as the authority under Section 458 of the Companies Act.

Conclusion:

We have a fantastic team that understands each and every industry and organizes the overall strategy for the valuation project accordingly. For all of their Valuation Services requirements in India, we cater to all major industries, including start-ups and corporations.

Location: India

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