Written by Amarnath Simha, pursuing  Diploma in Companies Act, Corporate Governance and SEBI Regulations and Certificate Course in Real Estate Laws offered by  Lawsikho as part of his coursework.  Amarnath is a practicing lawyer in Bengaluru and working in the field of Civil Litigation for the past 17 years.


The Companies Act, 2013 (Act for short) has introduced the concept of Registered Valuer. Section 247 of the Act makes it mandatory that where the valuation is required for any stocks, shares, debentures, property, securities and/or goodwill or any other assets or the net worth of a company and/or its liabilities by and under the provisions of the Act, the valuation shall be done by a registered valuer.  The registered valuer has to be appointed by an audit committee and in its absence the Board of directors.

Sub-section 2 of Section 247 also provides for requirements of a valuer and it includes that the valuer should not undertake a valuation of assets in which either he has or becomes interested, directly or indirectly.  Sub-section 3 provides for punishment to the valuer for contravention of the Act and its rules and also provides for imprisonment as punishment where the contravention was made with an intention to defraud the company and/or its members.  If the valuation is convicted under sub-section 3, then he not only becomes liable to refund the fees received by him but will also be exposed to damages to the company or any other person for any loss/claims arising out of the incorrect and/or misleading statements in the valuation report.

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Provisions which mandate valuation

A brief look at the Act would show that there are a few provisions which mandate valuation through a registered valuer.  Some of them are briefly referred here-under:

  • Section 62(1)(c): Further issue of share capital:  Where the shares are further issued, then the price of those shares will have to be valued by a registered valuer.
  • Section 192(2): Restriction on non-cash transaction involving directors:  The notice for approval of the resolution in a general meeting shall be accompanied by the valuation of the assets by the registered valuer.
  • Section 230(2): Scheme for corporate debt restructuring: a valuation report with regard to shares, property, assets of the company is necessary.
  • Rule 8 of Companies (Share capital and debentures) Rules, 2014:  Issue of sweat equity: the price shall be determined by a registered valuer.

Even SEBI regulations and IBC requires valuation by a registered valuer.

The Rules and the Structure

The Ministry of Corporate Affairs has notified the Companies (Registered Valuers and Valuation) Rules, 2017 (Rules for short) with effect from 18.10.2017.  Under the transitional arrangement, the existing valuers could continue without a certificate of registration till 31.1.2019.  However with effect from 1.2.2019, for the provisions requiring a valuation by a registered valuer, no stop-gap arrangements have been made and it has to be through a registered valuer.

The rules define a valuer and a registered valuer to mean a person registered with the authority in accordance therewith and defines the term ‘registration’ and ‘certificate of registration’ to mean the certificate of registration granted to a valuer by the authority.  The authority has been defined to be an authority specified by the Central Government.

The Central Government has designated the IBBI- Insolvency and Bankruptcy Board of India to be the authority under the Rules.  The IBBI website shows that around Eleven Registered Valuers Organisations have been recognized by it as on 23.04.2019 with the classes of assets mentioned against it with which they are entitled to deal with.  The classes of assets as mentioned are: (1) land and building (2) Plant and Machinery (3) Securities and Financial Assets.

Rule 5 requires the IBBI to conduct a valuation examination for individuals who have completed educational courses as a member of a RVO.  The valuation examination for each class of assets is different and carries a different syllabus.  The syllabus is laid down by the IBBI and the curriculum for the Registered valuers organizations is provided by the IBBI.

To be a registered valuer, the individual will have to pass the valuation examination and have requisite qualifications.


Who can apply for the Valuation Examination

Rule 4 lays down the qualification and expertise required for an individual to apply for the examination.  An individual must be a post graduate degree or diploma holder of a specified discipline from University recognized in India and at least have three years experiences in those disciplines or must have a Bachelors degree in the specified discipline with five years of experience or be a member of a professional institute with three years experience. Annexure IV to the rules specifies the disciplines or professional membership required for the particular classes of assets. Annexure IV makes it clear that not degrees of all disciplines are accepted and only a few degrees are accepted for each class of assets and they vary.

Annexure IV prescribes the following to be the eligibility criteria:

  • For Asset class; Plant and Machinery:  Graduate (with five years experience) or Post graduate (with three years experience) in Electrical, Electronic and communication, Mechanical, Electronic and Instrumentation, Chemical, Production, Textiles, Metallurgy, leather, Aeronautical Engineering or graduate in the valuation of plant and machinery or equivalent.
  • For Asset Class; Land and Building: Graduate (with five years experience) in Civil Engineering, Architecture or town Planning or equivalent or Post graduate (with three years experience) in above courses and also in the valuation of land and building or real estate valuation (two years full PG course)
  • For Asset class; Securities or financial assets: ACA or FCA, CS, ICAI, MBA or PGD in Business Management( specialization in Finance) or Post graduate in Finance.  All with three years of experience.

For applying as such, apart from the above qualification and expertise, the individual must get himself registered with a Registered Valuation Organisation and undergo a training programme rendered by them. While applying for the examination, he has to produce the training completion certificate issued by the registered valuers’ organization mandatorily to the authority.

Who can apply to be a Registered Valuer?

Rule 3 states that the individual seeks to become a registered valuer must be a resident of India and must apply within three years of passing the valuation examination and must have been recommended by the registered valuers organization of which he is a valuer member. Rule 3 further states that he must not have been convicted of an offence punishable with imprisonment for a period of more six months or involving moral turpitude and a period of five years has not elapsed before the date of application.  The rule further states that the applicant must not have been levied a penalty under section 271 J of the Income Tax Act (Penalty for furnishing incorrect information in reports or certificate)  and five years must have elapsed before filing the application if penalty levied.

The Rule further states that the applicant must be a fit and proper person for determining which the IBBI may take into account any relevant consideration which is not limited to integrity, reputation and character, and competence and financial solvency.

There are a few more restrictions on the partnerships and companies which seek to apply for registration i.e., the partnerships and for companies must have set up for the sole purpose of rendering professional or financial services including valuation services and further the company applying must not be a subsidiary, joint venture or associate of other company and at least three directors or partners are registered valuers and atleast one of the directors or partners are registered valuers for the asset class for which the company is applying.

Conditions of Registration

Rule 7 lists the conditions for registration for being a registered valuer.  A registered valuer cannot conduct a valuation of classes of assets than for which he has been registered.  He must take prior permission of IBBI before shifting his membership from one registered valuer organization to another.  He has to maintain records of each assignment for a period of three years from the competition of such assignment.  He has to abide by the code of conduct as mentioned in Annexure I to the rules.  He has to take adequate steps for the redressal of grievances.

In case of partnerships and companies, apart from the above, only those partners or directors who are registered valuers can act and sign on behalf of it and also disclose the extent of capital employed or contributed by such persons.  The partnership shall be jointly and severally liable along with the partner who signs on behalf of the partnership firm.  The company is liable along with the director who signs.  In case of the removal of such partner or director, the partnership firm and the company must give immediate intimation to the authority along with detailed reasons for such removal.  Hence to become a registered valuer, a person must take all the above mentioned steps and have knowledge of the above.

Cancellation or Suspension of Registration

However, the authority, IBBI, can cancel or suspend the registration of a valuer for violation of the provisions of the Act or any other law or rules or condition of registration.  The authorised officer nominated by IBBI can conduct an investigation and before taking the necessary action, shall call upon the registered valuer to show cause.  He has to dispose of the cause shown after adhering to principles of natural justice and by a reasoned order.  He is also authorised to order a warning also instead of suspension or cancellation.  The order will come into effect 30 days after it is passed and it is appealable to the authority, IBBI.

A registered valuer’s work will become sought after in every company while at the same time, the valuation itself becomes streamlined and regulated bringing responsibility and accountability to every valuation.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill. 


  1. I have completed my btech last year in 2018 and i want to get registered as valuer, am i eligible for it.
    If yes than guide me through the process.

  2. Hi Very good article Daisy Roy.
    Whether practising Advocate who holds the other qualification of ACA or CS can enroll as Registered Valuer for security valuation?


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