Section 247 of the Companies Act, 2013
Section 247 of the Companies Act, 2013
Title: "Valuation by Registered Valuers"
📘 Summary:
Section 247 lays down provisions regarding the valuation of assets, liabilities, shares, or net worth of a company by a Registered Valuer to ensure fairness, accuracy, and transparency in financial reporting and transactions.
🔍 Key Provisions:
✅ 1. Who can conduct valuation?
Only a Registered Valuer can perform valuations under the Act.
The valuer must be registered with the central government or an authority designated by it (such as the Insolvency and Bankruptcy Board of India (IBBI)).
📐 2. Duties of Registered Valuer:
The Registered Valuer must:
Conduct valuation impartially, independently, and without bias.
Exercise due diligence and follow prescribed rules and standards.
Avoid any conflict of interest – should not undertake valuation if they have any interest in the assets being valued.
🚫 3. Disqualification:
A valuer is disqualified from acting if:
They are directly or indirectly interested in the asset or company,
They fail to meet prescribed professional or ethical standards.
⚖️ 4. Penalty for Contravention:
If a valuer:
Contravenes the provisions of this section, or
Acts with intent to defraud or misrepresent,
Then:
Penalty: Fine between ₹25,000 to ₹1,00,000.
If there is fraudulent intent, the valuer may also face:
Imprisonment up to 1 year, and/or
Fine between ₹1,00,000 and ₹5,00,000.
They may also be liable to refund the fees and compensate for any losses caused.
🧾 Purpose:
To ensure:
Credible and accurate valuations for corporate actions (e.g., mergers, acquisitions, restructuring).
Investor protection and corporate transparency.
Accountability of valuers through registration and regulation.
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