The significance of accurate valuation within the ambit of the Companies Act of 2013 cannot be overstated. The Act necessitates a meticulous evaluation of various assets, shares, liabilities, and goodwill through the expertise of Registered Valuers. This discussion delves into the pivotal role these professionals play and the stringent qualifications and ethical standards they must adhere to in executing their responsibilities. 

Valuation by Registered Valuers: Upholding Integrity

Under the provisions of the Companies Act, when valuations are mandated for any of  company’s assets or liabilities or its networth, it becomes imperative that these valuations are conducted by individuals possessing requisite qualifications and experiences. These individuals, registered as valuers, are appointed by the Audit Committee or the board of directors in their absence. 

The responsibilities of the appointed valuer encompass: 

  • Conducting impartial, accurate, and equitable valuations of the designated assets.
  • Exercising due diligence and abiding by prescribed rules during the valuation process.
  • Maintaining a strict ethical stance by abstaining from valuing any asset in which they hold direct or indirect interests during a period of 3 years prior to his appointment as valuer or 3 years after the valuation of assets was Conducted by him.

Qualification Criteria for Registered Valuers

The eligibility criteria for becoming a registered valuer under the Companies Act are rigorous and designed to ensure competence, integrity, and ethical conduct. These qualifications include: 

Membership and Recommendations:

The applicant should be a valuer member of a Registered Valuers Organization (RVO) and recommended by the respective RVO for registration as a valuer.

Valuation Examination:

The applicant must have passed the valuation examination within three years preceding the date of making the application.

Qualification and Experience:

Possession of required qualifications and relevant experience is essential for registration. 

Personal Status:

The applicant must not be a minor, declared unsound of mind, or an undischarged bankrupt. Additionally, they should not have applied to be adjudicated as a bankrupt.


The applicant must be a resident of India. 

Criminal Record:

A clean record is imperative, which includes not being convicted by any competent court for an offence punishable with imprisonment for a term exceeding 6 months or for an offence involving moral turpitude. Furthermore, a period of 5 years should not have elapsed from the date of expiry of the sentence. If sentenced for imprisonment of 7 years or more, the individual shall not be eligible for registration. 

Income Tax Act Compliance:

Additionally, the applicant should not have been levied a Penalty under Section 271 J of the Income Tax Act.

Fit and Proper Person:

Upholding the status of being a ‘fit and proper’ individual is a requisite, ensuring ethical and professional conduct.

Accountability and Consequences

The Act also outlines penalties and consequences for contravention. Any valuer convicted under Section 247 of the Companies Act faces penalties, including fines or imprisonment, especially if their actions were intended to defraud the company or its stakeholders. 

Moreover, if a valuer is found guilty, they are obliged to: 

  • Refund their remuneration to the company.
  • Compensate for damages arising due to incorrect or misleading statements made in their valuation report. 


The role of registered valuers is pivotal in maintaining transparency, fairness, and accuracy within the corporate landscape. Upholding the principles of impartiality, due diligence, and ethical conduct is not merely a mandate but a cornerstone in ensuring the trust and reliability of valuation processes under the Companies Act.

The stringent qualifications, ethical standards, and consequences for contravention underscore the commitment to precision, integrity, and accountability that registered valuers must uphold in their professional engagements.

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Qualification: Student - CA/CS/CMA
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Location: Mysuru, Karnataka, India
Member Since: 24 Nov 2023 | Total Posts: 3

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March 2024