Showing posts with label MCA updates. Show all posts
Showing posts with label MCA updates. Show all posts

Saturday, 21 October 2017

MCA issues Notification for commencement of Section 247 of the Companies Act, 2013 relating to Valuation by Registered Valuers

October 21, 2017 MCA updates , 0 Comments



[To be published  in the Gazette of India, Extra-ordinary, Part-II, Section 3, Sub­

section (ii)]


MINISTRY OF CORPORATE AFFAIRS Notification


New Delhi, the 18th  October, 2017



S.O.               (E).-Inexercise of the powers conferred by sub-section (3) of section

1of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 18th October, 2017 as the date on which the provisions of section 247 of the said Act shall come into force.


[F. No. 1/27/2013-CL-V]

r


(Amardeep Singh Bhatia)
Joint Secretary to the  Government of India





The Companies (Registered Valuers and Valuation) Rules, 2017, finalized after public consultation and detailed deliberations with stakeholders, have also been issued simultaneously. 

The Ministry of Corporate Affairs has issued Notification for commencement of Section 247 of the Companies Act, 2013 [Valuation by Registered Valuers] with effect from 18th October, 2017. The Companies (Registered Valuers and Valuation) Rules, 2017 (Rules), which have been finalized after public consultation and detailed deliberations with stakeholders have also been issued simultaneously.

The Rules provide for registration of different category of valuers and lay down the requirements on their eligibility, qualifications and experience. The Registered Valuers are also required to be members of the Registered Valuers Organisations (RVOs), recognised by the authority under the Rules.  The eligibility norms for RVOs to be recognised have also been provided in the Rules which, inter alia, include for an internal governance structure which should provide for enforcement of a code of conduct on the registered valuers, training and conduct of educational courses for the valuation of specific asset classes for which the RVO concerned is recognised.


The Rules, inter alia, provide for Registration of Valuers for conduct of valuation under the Companies Act, 2013. The valuers, who may be individuals or partnership entities or companies, would be required to be registered with the authority specified by the Central Government. 


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Friday, 20 October 2017

Govt frames rules for valuation of unlisted firms, method yet to be decided

October 20, 2017 MCA updates , News 0 Comments


Rules limited to valuers, do not have the all-important component of valuation methodology; till the time methodology is framed, international standards to be followed


After much dilly-dallying, the Ministry of Corporate Affairs (MCA) has come up with rules on valuation of unlisted companies that will do away with arbitrariness at the time of mergers and acquisitions (M&As), and transfer of shares. The draft for the same was put up for consultations four years back.

However, these rules are limited to valuers and do not have the all-important component of methodology of valuation. Till the time the methodology is framed by a committee that is yet to be set up, international standards will be followed. Experts state that till the final methodology is drawn up, it is difficult to say which country’s rules will have a presence in India. Each country has its own set of rules for the same. 

Chander Sawhney, partner and head of valuations at Corporate Professionals, says there are three broad global methods of valuation — assets, income, and the market approach of the company.

India has never had rules for all firms, though there are separate norms for listed companies laid down by the markets regulator. Currently, the Securities and Exchange Board of India (Sebi) has its own set of valuation guidelines for listed companies on takeovers, preferential allotment of shares and so on. As such, this is a beginning towards framing rules for valuation by registered valuers.

According to the Companies (Registered Valuers and Valuation) Rules, 2017, the Insolvency and Bankruptcy Board of India (IBBI) is the authority responsible for these regulations. 

These rules are basically about who could become valuers and the process of registration and deregistration of these valuers with the IBBI.

According to the rules, chartered accountants can conduct a financial audit, while subject experts will have to be hired for other specific audits such as for machinery and real estate. Essentially, there will be separate financial valuers and technical valuers. These rules will also be applicable to companies going in for liquidation under the Insolvency Code. Once the methodology is also finalised, it will help other regulators such as SEBI to follow uniform guidelines.

Sawhney says these rules will be applicable under the Companies Act, 2013, until sectoral regulations also adopt these rules.

Companies are now allowed to function as registered valuers, provided three or all of their directors are registered valuers.  Because of this, merchant bankers also qualify to become valuers. This is a modification of drafts issued by the MCA in 2013, which had proposed to allow only individuals and partnership firms such as limited liability partnerships (LLPs). Around 95 per cent of merchant bankers in India are companies and only five per cent are LLPs.

Unregistered valuers can continue to work till March 31, 2018.

Experts say these rules will bring in professional discipline among valuers in India and will lead to standardisation in this field.  

This move will also make M&As easier, as valuation will be done on the basis of certain guidelines. Before these rules, there was a great deal of subjectivity that was usually challenged, experts had opined.  They had also opined that litigation on account of valuation will reduce with the regulations. The rules state that all transactions with third parties undertaken during the period the valuer has been appointed has to be reported to the IBBI.

A disciplinary committee will be constituted which will hear complaints against the valuer. An appellate panel will also be set up which will look into appeals against the disciplinary committee’s order. An appeal can be filed within 30 days of the initial order. An individual who has been declared bankrupt cannot enrol as a valuer.
NORMS FOR VALUERS
  • Chartered accountants (CAs), company secretaries (CS), subject experts can become valuers
  • Unlike draft rules, these norms allow companies to become valuers
  • Merchant bankers can become valuers
  • CAs/CS will be allowed to conduct only financial audits
  • Others (subject experts) will do technical audits
  • Professionals with a graduate degree will need 3-year audit experience 
  • Draft rules had proposed 5-year audit experience
  • Insolvency and Bankruptcy Board of India to be regulatory authority

 The Business Standard, New Delhi, 21 October, 2017 

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Thursday, 12 October 2017

MCA Updates Names of newly appointed Directors, where all the directors stand vacated due to disqualification

MCA Updates Names of newly appointed Directors, where all the directors stand vacated due to disqualification

October 12, 2017 MCA updates , 0 Comments

F. No.03/73/2017/CL-II
Government of India
Ministry of Corporate Affairs

5th Floor ‘A’ Wing, Shastri Bhawan, New Delhi.
Dated: 06.10.2017
To,
The Regional Directors/Registrars of Companies

Sub: – Addition of names of the newly appointed Directors in the MCA database in the Companies where all the directors stand vacated due to disqualification under section 164(2)(a) r/w 167(1) of the Companies Act, 2013-reg
Sir(s),
With reference to the subject cited I am directed In inform you that reference have been received in the Ministry regarding the matters related to appointment of directors in the Companies in which existing directors stand vacated in terms of Section 167 read with 161(2)(a) of the Act.
2. In this regard, it is to be understood that the promoters may appoint new directors u/s 167(3) of the Act. In such cases, the issue of role check shall arise.
3. The RoCs already have facility to add signatory details from the back end with the approval of RD.
4. The RoCs/RD’s hereby directed to approve such applications within one week from the date of receipt of application.
This issues with the approval of Competent Authority.
Yours faithfully.
(Sanjay Kumar Gupta)
Joint Director
23381664
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