IBC & Companies Act Valuations
Introduction
Valuations under the Insolvency and Bankruptcy Code (IBC) and the Companies Act play a critical role in ensuring transparency, fairness, and regulatory compliance. These valuations often form the foundation for decisions made by courts, lenders, and regulatory authorities.
Regulatory Framework
⚖️ Under the Companies Act, 2013, certain valuations must be conducted by registered valuers. Similarly, IBC mandates independent and compliant valuations for insolvency proceedings.
Key Expectations from Authorities
🔍 Independence and objectivity of the valuer
📊 Use of recognized valuation methodologies
📄 Proper documentation and assumptions
✅ Transparent and defensible reporting format
Importance for Stakeholders
💰 For lenders, valuations determine recovery expectations.
⚖️ For courts and resolution professionals, they ensure fairness in asset distribution and resolution planning.
Best Practices
🗂️ Maintain complete financial and legal documentation
👨💼 Engage IBBI-registered valuation professionals
🔄 Ensure periodic valuation updates during long proceedings
Conclusion
🛡️ IBC and Companies Act valuations are more than compliance—they are instruments of financial transparency and stakeholder protection.
