Companies-Rules-Registered-Valuers-and-Valuation

Companies Rules – Registered Valuers and Valuation

Companies Rules – Registered Valuers and Valuation

The Ministry of Corporate Affairs (MCA) has implemented Companies (Registered Valuers and Valuation) Rules for all the eligible individuals to register as a registered valuer. A valuer shall be identified as a person who is registered with a registered value organisation as per sub-rule (5) of rule 13. The registration for a Registered Value Organisation shall be established as per the Insolvency and Bankruptcy Code 2016. The rules are applicable to the following:

  • Property
  • Shares
  • Debentures
  • Securities
  • Stocks
  • Goodwill
  • Any other assets, net worth of the company or
  • Liabilities under the provision as per the Companies (Registered Valuers and Valuation) Rules

The rules also provide the rules related to registering as an individual or organisation registered valuer, valuation standards, identifying ‘asset class’ and certification.

Registering as a Registered Value Organisation

Structure of Governance

  • To be recognised as a registered value organisation, the company should have registered as a Section 8 company as per the Companies Act 2013
  • The company shall not operate its functions other than as a registered value organisation
  • No individual who resides outside India shall supervise the company
  • Individuals residing outside the country shall not hold more than 49 per cent of the companies’ share capital
  • The company shall not be an ancillary body of a corporate for more than a year
  • Any promoters, directors or persons holding more than 10 per cent of the companies’ share capital shall be deemed fit

Click here to know more details on how to register as a Section 8 Company

Bye-Laws for Valuation Profesional Organisations (VPO)

  • To register as a VPO, the company should submit the bye-laws to the registered authority along with the application
  • The bye-laws should provide all the details as per the model bye-laws in Part II of the rules
  • All the details provided in the bye-laws and policies shall be published on the  website of the company

Amendment of Bye-Laws

  • The Bye-Laws should be amended only by a resolution passed through votes as per sub-rule (1)
  • The favour of the votes shall not be cast three times for any favourable resolution
  • The company shall apply for registration to the Registration Authority within seven days after passing the resolution
  • After receiving approval from the Registration Authority, the company shall amend the bye-laws on the seventh day or as stipulated by the Registration Authority
  • The VPO shall send a printed a copy to the Registration Authority within 15 days from the date of amending the bye-laws

Eligibility for VPO

  • The company should have been set up through an Act of Parliament
  • For companies registered before 1st April 2017
    • The company should be registered through Section 25 of Companies Act 1956
    • Registered as a society through Societies Registration Act 1860 or as per any relevant state law
    • Established as a trust governed by the Indian Trust Act 1882
  • For companies established after 1st April 2017, it should be registered as Section 8 of Companies Act 2013. The bye-laws should be published as per Schedule III
  • The company should be eligible to conduct exams, provide certificates, grant memberships or certificates
  • It shall also be eligible to grant memberships and certificates to individuals or partnership entities related to the valuation of the asset class
  • Should be eligible to conduct training to individuals before providing certificates
  • Should provide continuing education, monitor and review the quality of service
  • Should not have disqualifications as mention in sub-rule (1)(f) to (i)
  • The company shall be undergoing bankruptcy process or insolvency resolution
  • The partners should not have been disqualified as per sub-rule (1) (a) to (i)
  • The company should not have the majority of the partners practising abroad
  • The company should have its proportionate number of partners as registered valuers

Documents Required to Register as VPO

  • Proof of Address, Corporate Identification Number (CIN), PAN and other relevant identification numbers
  • Details on Designations of members as mentioned in the application provided to the Registration Authority
  • Documents on the number of members registered with the VPO who practice valuation
  • Details of the examination conducted for the members
  • Details of the requirements for continuous education
  • The company should have made the list of registered members public

Application Process

  • The company shall apply to the Registration Authority on Form D as per Schedule II
  • The Registration Authority shall scrutinise the application made by the company. In the case of any mismatched, the Registration Authority shall provide support to rectify.
  • After verifying the documents, the Registration Authority shall ask the applicant to appear in person to provide clarifications or rectification for processing the application
  • Upon successful validation, the Registration Authority shall grant the certificate in Form E as per Schedule II
  • However, upon rejection of certification, the company shall provide detailed information for providing the certification. The company shall provide all the necessary documents within 15 days from the date of the communication.

Register of Members

The following details should be maintained by the company:

  • Name, identity proof, contact details and address
  • Membership number and the date of enrolment
  • Date and Registration number with the Registration Authority
  • Details of pending grievances
  • Details of disciplinary proceedings pending against the member with the Organisation
  • Details of disciplinary orders passed against the individual by the Registration Authority

Registering as a Valuer

Qualification

  • The individual should have a post-graduate degree or post-graduate diploma from a recognised institution or university
  • The individual should have a minimum of three years of experience in the specified discipline such as Plant and Machinery, Land and Building and Securities or Financial (Annexure-IV)
  • If the individual posses only a bachelor degree or bachelors in diploma they should possess five years of experience in the specified discipline
  • The individual shall have a membership with a professional institute registered through an Act by the Parliament. The membership shall be attained as the Companies (Registered Valuers and Valuation) Fourth Amendment Rules 2018
  • Any individual that does not register as a valuer shall be liable for punishment as per Section 247(3) of the Act

Eligibility

  • The Valuer shall apply for registration only if the applicant has cleared within three years
  • If the applicant is above fifty years of age and has been involved for at least ten valuation assignments of the assets, the applicant is not required to clear the examination. The asset valuation should have crossed five crore rupees
  • Should have the appropriate qualification
  • The Valuer should be above 18 years of age
  • The Valuer should be sound-minded individual
  • The Valuer should not have been bankrupt or applied or applied for bankruptcy
  • The Valuer should be a resident of India
  • The Valuer should not have been convicted for an offence or moral code of conduct

Application Process for Registering as a Valuer

  • To register, the applicant shall apply to the Registration Authority in Form A as per Schedule II.
  • Along with the application form, the fee for registration should be attached in favour of the Registration Authority
  • The Registration Authority shall examine the application made by the individual. In the case of any mismatched, the Registration Authority shall provide support to rectify.
  • After verifying the documents, the Registration Authority shall ask the applicant to appear in person to provide clarifications or rectification for processing the application
  • Upon successful validation, the Registration Authority shall grant the certificate in Form C as per Schedule II within sixty days of the application
  • However, upon rejection of certification, the individual shall provide detailed information for providing the certification. The individual shall provide all the necessary documents within 15 days from the date of the communication

Fee for Registration

For Registration as a Valuer

For registring as a Valuer, the applicant shall pay a non-refundable fee of Rs.10,000 in favour of the Registration Authority along with Form A

For Registration as a Partnership Entity

For registring as a Partnership Entity, the applicant shall pay a non-refundable fee of Rs.10,000 in favour of the Registration Authority or partnership entity along with Form B

Scroll down to know more on Form A, B, C, D and E

COMPANIES REGISTERED VALUERS AND VALUATION RULES

Other Related Guides

Joint Shareholding Joint Shareholding - Companies Act A joint shareholder refers to a person who holds one or more shares jointly with one or more persons. This article...
Disadvantages of Private Limited Company Disadvantages of Private Limited Company Private limited company is an ideal business entity for a majority of medium and large sized business, as it...
Quorum Quorum - Companies Act, 2013 Quorum is the minimum number of directors that is considered to be necessary to conduct a Board meeting. Board meetings ...
Membership in a Company Membership in a Company By definition, the term “Member” in relation to a company means, one who has agreed to become the member of the company by en...
Rules under Companies Act 2013  Rules under Companies Act 2013  The Companies Act was evolved in the year 1913 based on the British Company Act 1908 and later modified in the year ...

Post by Peter

Peter is a Senior Content Writer and Copy Editor in Finance specializing in GST and Import & Export. He has also written articles on Medical, Philosophy, and Literature and published research papers in international journals.