Who can be a Registered Valuers under Companies (Registered Valuers and Valuation) Rules, 2017

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THIS ARTICLE WAS WRITTEN BY SHRUTI KAPOOR, A STUDENT OF LUCKNOW UNIVERSITY.

Introduction

International Valuation Standard Council has defines valuation as “the process of determining the Economic worth “of an assets of company under certain assumption and limiting condition and subject to the data available on the valuation date. The Central Government makes the rules regarding the same in exercise of the power conferred by Section 247 read with section 458 and 469 of the Companies Act 2013. Valuation is done by Registered Valuers as per Valuation Standard notified from time to time by the Central Government.

Need for Valuation

Valuation is needed for following purpose:

1. Commencing a sale process
2. Resolving Sharing dispute.
3. For business planning & future decision making
4. Determining tax obligation
5. For litigation
6. To access external source of funding.

Eligibility to be a Registered Valuer 

Under sub-rule 1 of Rule 5 individual eligibility to be a registered valuer is give which are as follow:

1. Has passed the Valuation Examination in the 3 year preceding the date of making an application under Rule 7. Provided that if any individual has completed 50 years of age and has been involved in not less than 10 valuation assignments of the assets amounting to 5 crore rupees or more, during 5 years preceding the commencement of these rules, he shall not be required to pass the Valuation Exam.

2. Has the qualification and experience specified in Rule 6.
3. Is not a minor
4. Not of unsound mind
5. Not an undischarged bankrupt, or has not applied to be adjudicated as an bankrupt.
6. Is resident of India.
7. If any person is convicted for an offence punishable with imprisonment for a term exceeding 6 month or for an offence involving moral turpitude, then he is not eligible to be a registered valuer unless 5 year has not elapsed from the date of the sentence.
8. Unfit and improper person cannot be registered valuer. Registered Authority may take account of any relevant consideration, including but not limited to the following criteria:

• Integrity, reputation and Character,
• Absence of conviction and restrain orders, and
• Competence, including financial solvency and net worth.

Under Sub-Rule 2 of Rule 5 partnership entity eligibility to be a registered valuer is given.

Qualification and Experience

An individual shall have the following qualification to be eligible for registration under Rule 5.

• Post-graduation degree, in the specified discipline, from a University established, recognized or incorporated by law in India and at least 3 years of experience in the discipline  thereafter or,
• A Bachelor’s Degree in the specified discipline from the university established, recognized or incorporated by the law and at leadt 5 years of experience in the discipline thereafter, or
• Membership of a profession institute set up under an Act of Parliament and at least five year experience after such membership

In this rule ‘specified discipline’ referred means the specified discipline which is relevant for the valuation of the class asset for which the registrations sought and a valuation professional organisation recognised under these rules.

 Valuation examination

Rule 4 provide that Registered Authority or designated agent, conduct a Valuation Examination to test Knowledge, practical skills   and ethics of individual in respect of valuation. The syllabus for Valuation Examination is determined by Registered Authority on the recommendation of a Committee of Experts constituted by it. The qualifying marks, shall be published on the website of Registered Authority at least 3 month before the examination. A person may appear for the valuation Examination any number of times and when passed it receive acknowledgement of passing the examination.

Process for application for certificate of registration

Rule 7 provide that the individual eligible for registration as a registered valuer may make an application to Registered Authority in Form A of Schedule II and partnership entity may make an application to the Registered Authority in Form B of Schedule II, along with non- refundable fee of 10,000 in favour of the Registered Authority.

The registered Authority shall examine the application, and give an opportunity to the applicant to remove the deficiencies, if any in the application. if the registered valuer is satisfied it may grant a certificate of registration to the applicant to carry on the activities of a registered valuer for the relevant class of assets in Form C of the Schedule II within 60 days of the receipt of application, excluding the time given by the Registered Authority for presenting additional documents, information or clarification, or appearing in person, as the case may be.

Refusal to grant certificate

If the Registration Authority is of the prime facie opinion that registration ought not to be granted, it shall communicate the reason within 45 days of receipt of the application. The applicant shall submit an explanation as to why his/its application should be accepted within 15 days of the receipt of the communication, to enable the Registration Authority to form a final opinion. After that shall communicate its decision (acceptance or rejection) within 30 days of receipt of examination

Condition of Registration

Condition for Registration is mention in Rule 9 which are as follow:

1. at all-time comply with the provision of Act and Rules;
2. at all times comply with the valuation Standard,
3. maintain records of all assignments undertaken for at least 3 years
4. Comply with Code of Conduct etc.