IBBI mandates valuation requirement under Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016

Sep 17, 2019 | by Avantis RegTech Legal Research Team


The Insolvency and Bankruptcy Board of India (IBBI) on September 16, 2019, issues Circular mandating valuation required under the provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. IBBI issued Circular No. IBBI/RV/019/2018 dated October 17, 2018 mandating valuation required under the Code, 2016.

The followings are the Sections or Rules required for valuations under the Companies Act, 2013:

Sl.No.

Section or Rules

Particulars

1.

Section 62(1)(c) of the Companies Act, 2013 read with Rule 13(1) of the Companies (Share Capital and Debentures) Rules, 2014

Further issue of share capital

2.

Section 177(4)(vi) of the Companies Act, 2013

Terms of reference of Audit Committee

3.

Section 192(1) and 192(2) of the Companies Act, 2013

Restriction on non-cash transactions involving directors

4.

Section 230(2)(c)(v) and Section 230(3) of Companies Act, 2013

Power to compromise or make arrangements with creditors and members

5.

Section 232 (2)(d) and Section 232 (3)(h)(B) of the Companies Act, 2013

Merger and amalgamation of companies

6.

Section 236(2) of the Companies Act, 2013

Purchase of minority shareholding

7.

Section 247(1) of the Companies Act, 2013

Valuation by Registered Valuers

8.

Section 281(1)(a) of the Companies Act, 2013

Submission of report by Company Liquidator

9.

Rule 2(c)(ix) of the Companies (Acceptance of Deposit) Rules, 2014

Exclusions from deposits

10.

Rule 6(1) of the Companies (Acceptance of Deposit) Rules, 2014

Creation of security

11.

Rule 8(6), (7), (9) and (12) of the Companies (Share Capital and Debentures) Rules, 2014

Issue of sweat equity shares

12.

Rule 16(1)(c) of the Companies (Share Capital and Debentures) Rules, 2014

Provision of money by company for purchase of its own shares by employees or by trustees, for the benefit of employees

13.

Rule 12(5) of the Companies (Prospectus and Allotment of Securities) Rules, 2014

Return of allotment

 

The followings are the provisions required for valuations under the Insolvency and Bankruptcy Code, 2016:

Sl.No.

Section/Regulation/ Rules

Particulars

1.

Section 59(3)(b)(ii) of the Insolvency and Bankruptcy Code, 2016

Voluntary liquidation of corporate persons

2.

Section 46(2) of the Insolvency and Bankruptcy Code, 2016

Relevant period for avoidable transactions

3.

Regulation 27 read with regulation 35 of the IBBI(Insolvency Resolution Process for Corporate Persons) Regulations, 2016

1) Appointment of registered valuers;

2) Fair value and liquidation value

4.

Regulation 35 of the IBBI(Liquidation Process) Regulations, 2016

Valuation of assets intended to be sold

5.

Regulation 3(1)(b)(ii) of the IBBI (Voluntary Liquidation Process) Regulations, 2017

Initiation of liquidation

6.

Regulation 26 of the IBBI(Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017

Appointment of registered valuer

7.

Regulation 34 of the IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017

Fair value and liquidation value

Thus, IBBI requests all the stakeholders to comply with this Circular by referring relevant provisions of the Act, the Code and the Rules and Regulations for the purpose of compliance.

[Circular No. IBBI/RVO/026/2019]


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