Section 247 Of Companies Act 2013: Registered Valuers Qualifications
Updated: Oct 7, 2022
What is a Registered Valuer?
For matters requiring valuation under the Companies act, the Ministry of Corporate Affairs initiated the Companies (Registered Valuers and Valuation) Rules, 2017 ("Rules"). The concept of a "registered valuer" was introduced for the first time under Indian law via Section 247 of Chapter VXII of the Indian Companies Act.
What does Section 247 say?
Section 247 of the Companies Act states that when a valuation is required in respect of any property, stocks, shares, debentures, securities, or goodwill, or any other equity stake or net value of a company or its obligations under the provisions of this Act, it must be valued by a person with such qualifications and experience and registered as a valuer in the manner and on the terms and conditions as may be prescribed and appointed by the audit committee or in the manner and on the terms and conditions.
Registered Valuers' Qualifications for Various Asset Classes
A registered valuer for plant and machinery valuation must be a graduate or postgraduate in Electrical and Mechanic Engineering with at least 3 to 5 years of experience.
To value securities and financial assets, an individual must be a member of ICAL, ICSI, or the Institute of Cost Accountants of India, or an MBA with a specialty in Finance and at least three years of experience in the subject following graduation.
A registered valuer for land and building valuation must be a degree or postgraduate in civil engineering, architecture, or town planning with at least 3 to 5 years of experience.
Provisions of Section 247 of the Companies Act 2013
(1) A look at the company's ownership. If the Central Government believes there is a good cause, it may appoint one or even more inspectors to examine and testify on the members of any business, as well as other facts connected to the firm, in order to determine the genuine individuals. -
(a) who have or have had a financial stake in the company's success or failure, either real or perceived; or
(b) who have or have had the ability to control or substantially affect the company's policy.
(1A) Without prejudice to its powers underneath this section, the Central Government shall assign one or more inspectors under sub-section (1) if the Company Law Board declares by order, in the course of any proceeding before it, that the company's affairs should be investigated as to its membership as well as other matters pertaining to the company, for the purpose of assessing the true persons- (a) who are or were financially interested in the company.
(2) When appointing an investigator under subsection (1), the Central Government may specify the context of his investigation, whether in terms of the matter or the period for which it will be extended or otherwise, and may, for example, limit the enquiry to matters relating to specific shares or debentures.
(3) Subject to the terms of an inspector's appointment, his powers include the investigation of any circumstances required to be part of any arrangement or understanding that is or was observed or is likely to be noticed in practise and is relevant to the purposes of his investigation, even if it is not legally binding.
(4) Subject to the foregoing, the inspector's powers shall also extend, where the company has or has had a managing agent or secretaries and treasurers: (a) in the case that such managerial agent or secretaries and financial officers are or were a corporate body, to the investigation of a ownership of such body corporate's shares, and of who the individuals are or were who control or manage or controlled managed its affairs or; (b) in the case that such managing agent or secretaries and financial officers are partners; and
(c) in all situations, to the inquiry of who the people are or were who would be or were eligible to any portion of, or any sum constituting part of, such management agent or secretary and treasurers' salary.
(5) For the reasons of course of any investigation under this section, section 239, section 240, and section 241 shall apply, with the necessary modifications of references to the company's or any other body corporate's affairs, or those of any managing agent, secretaries and financial officers, or associate: Provided, however, that the said segments shall apply in relation with all persons (including persons concerned only on behest of others) who are or have been, or whom the investigator has reasonable cause to believe are, or who the inspector has reasonable cause to
(i)financially interested in the company's success or failure, or the apparent success or failure, or any other body corporate, managerial agent, secretaries and treasurers, or correlate whose membership or constitution is probed with that of the company; or
(ii) able to materially influence or control the policy of such company, body corporate, managing agent, secretaries and treasurers, or associate; as they apply to 1 officers and other employees and agents] of the company, other body corporate, or managing agent, secretaries and treasurers, or associate, as the case may be: Furthermore, the Central Government is not obligated to provide a copy or a complete copy of any report issued by an inspector designated under this section to the corporation or any other person, if the Central Government believes there is a valid reason for not disclosing the contents of the report or parts thereof; nevertheless, in such a case, the Central Government shall cause a copy of any such report, or as the case may be, parts thereof, to be preserved by the Registrar.