- REGISTERED VALUER:
‘Registered Valuer’ means a person registered as a valuer under Chapter XVII of the Act whereas the Ministry of Corporate Affairs vides its notification has implemented the Section 247 and Registered Valuer Rules w.e.f 18th October,2017.
As per section 247 of the Companies Act the valuation in respect of any property, Stock shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or its liabilities under the provision of this Act, it shall be valued by a person having such qualifications and experience and registered as a valuer in such manner, on such terms and conditions as may be prescribed.
So with the effect of this, the persons who were rendering the valuation service under the act may continue to render without certificate of registration upto 31st January, 2019 and with 1st February, 2019 the valuation report will be only given by registered valuer only as prescribed under section 247.
Whereas we see the Valuation through Income Tax prospective, there are various rules such as Rule11U, Rule 11UA, Rule 11UAA and Rule 11UBwhich cover various valuation options for the valuation of equity shares and other securities underThe Income Tax Act,2013.
| S.No | Mode of Allotment | Section & Provisions | Valuation As Per Companies Act | Valuation As PerIncome Tax Act |
| 1 | Right Issue of Shares |
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company | No requirement ofvaluation report for Right issue irrespective whether shares are issued on face value or premium | No requirement ofvaluation of shares as the companies are issuing shares to existing shareholder only in proportion to shareholding |
| 2 | Preferential Allotment of Shares | An issue of shares or other securities, by a company to any select person or group of persons on a preferential basis. | It is mandatory to obtain report from registered valuer whether the shares are issued on face value or premium. | The companies have to obtain valuation report from registered valuer if shares are issued on premium. |
| 3 | Private Placement of Shares | Private Placement means any offer or invitation to subscribe or issue of Shares to a selected group of persons by a company through private placement offer-cum-application, subject to specific conditions. | It is Mandatory to obtain valuation report from Registered valuer irrespective of shares are issued on face value or premium. | The companies have to obtain valuation report from registered valuer if shares are issued on premium. |
| 4 | Conversion OfDebenture IntoShare | Conversion of debentures into equity shares means to convert loan liability into capital liability. After converting debentures into equity shares, debenture-holder becomes shareholder. He will get right to vote. Without liquidation, their invested money will not be refunded. | It is mandatory to obtain the valuation report from registered valuer for the conversion of Debentures into Shares. | The companies have to obtain valuation report from registered valuer. |
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