IBBI mandates Valuation of a company can only be done by a registered valuer

Posted on 17 September 2019

Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi-110001

CIRCULAR
No. IBBI/RVO/026/2019 16th September, 2019 To

All Registered Valuers
All Recognised Registered Valuer Organisations All Registered Insolvency Professionals, and
All Registered Insolvency Professional Agencies.
(By mail to registered email addresses and on website of the IBBI)

Dear Madam / Sir,

Subject: Valuation required under the provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016.

Rule 10 of the Companies (Registered Valuers and Valuation) Rules, 2017 (Rules) read with section 247 of the Companies Act, 2013 (Act) require that a registered valuer shall conduct valuations required under the Act.

2. Circular No. IBBI/RV/019/2018 dated 17th October, 2018 of IBBI mandates that the valuations required under the Code or any of the regulations made thereunder shall be conducted by a registered valuer.

3. A list of the provisions of the Act and the Code under which valuations are required to be conducted by a registered valuer are at Annexures I and II respectively for ready reference of the stakeholders. The stakeholders are, however, advised to refer to the relevant provisions in the Act, the Code and the Rules and Regulations made there under, for the purpose of compliance.

Yours faithfully,

Sd/-
(Debajyoti Ray Chaudhuri)
Chief General Manager
Email: dr.chaudhuri@ibbi.gov.in

Encl.: Annexures I and II

ANNEXURE-I

Valuation required under the Companies Act, 2013

  

Sl. No.

Section / Rules

Particulars

1

Section 62(1)(c) of the Companies Act, 2013 read with Rule 13(1) of the Companies (Share Capital and Debentures) Rules, 2014

Further issue of share capital

2

Section 177(4)(vi) of the Companies Act, 2013

Terms of reference of Audit Committee

3

Section 192(1) and 192(2) of the Companies Act, 2013

Restriction on non-cash transactions involving directors

4

Section 230(2)(c)(v) and Section 230(3) of Companies Act, 2013

Power to compromise or make arrangements with creditors and members

5

Section 232 (2)(d) and Section 232 (3)(h)(B)  of the Companies Act, 2013

Merger and amalgamation of companies

6

Section 236(2) of the Companies Act, 2013

Purchase of minority shareholding

7

Section 247(1) of the Companies Act, 2013

Valuation by Registered Valuers

8

Section 281(1)(a) of the Companies Act, 2013

Submission of report by Company Liquidator

9

Rule 2(c)(ix) of the Companies (Acceptance of Deposit) Rules, 2014

Exclusions from deposits.

10

Rule 6(1) of the Companies (Acceptance of  Deposit) Rules, 2014

Creation of security

11

Rule 8(6), (7), (9) and (12) of the Companies (Share Capital and Debentures) Rules, 2014

Issue of sweat equity shares

12

Rule 16(1)(c) of the Companies (Share Capital and Debentures) Rules, 2014

Provision of money by company for purchase of its own shares by employees or by trustees, for the benefit of employees

13

Rule 12(5) of the Companies (Prospectus and  Allotment of Securities) Rules, 2014

Return of allotment

ANNEXURE-II

Provisions under the Insolvency and Bankruptcy Code, 2016 and the Regulations

  

Sl. No.

Section/Regulation/ Rules

Particulars

1

Section 59(3)(b)(ii) of the Insolvency and Bankruptcy Code, 2016

Voluntary liquidation of corporate persons

2

Section 46(2) of the Insolvency and Bankruptcy Code, 2016

Relevant period for avoidable transactions

3

Regulation 27 read with regulation 35 of the IBBI(Insolvency Resolution Process for Corporate Persons) Regulations, 2016

1) Appointment of registered valuers;

2) Fair value and liquidation value

4

Regulation 35 of the IBBI(Liquidation Process) Regulations, 2016

Valuation of assets intended to be sold

5

Regulation 3(1)(b)(ii) of the IBBI (Voluntary Liquidation Process) Regulations, 2017

Initiation of liquidation

6

Regulation 26 of the IBBI(Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017

Appointment of registered valuer

7

Regulation 34 of the IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017

Fair value and liquidation value







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