Valuation report in case of Right Issue

[Nitesh Kejriwal]

Dear Members,

Please advise on the following

1. In case of Right issue of shares by a Private Company, Do we have to get the share valued and make the offer at a premium? According to Companies Act, When we make share offer to foreign investors we need to get a valuation done by a CA and offer them at that value. Do local shareholders need to do that as well?

2. Can shareholder donate shares to non charitable trust without any consideration. Would trust or shareholder liable to capital gain tax if they did this?

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Thanks & Regards
Nitesh Kejriwal

CONTACT NUMBER. : +91 9051724636

[shruti bansal]

Hi,

Yes valuation need to be taken from a CA for deciding the price of allotment of shares in the case of resident shareholders as well.

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Regards

CS Shruti Bansal

B. Com(H), LL.B

Mob.: 9811530248

Shruti Bansal & Associates, 

Company Secretaries

RZ/23-B, Raghu Nagar, Pankha Road, opp.

Janak Cinema, New Delhi-110045

[Varun Mehra]

Dear Nitesh

As per the companies act, in the case of right issue No valuation is to be required but if shares issue to Existing Non resident Shareholder than it is to be valued by the independent CA.

But the case of share issue on private placement basis valuation is needed.

Also as per the income tax valuation is needed your auditor may ask. 

Regards, 

Varun Mehra

[Nikhil V. Gajjar]

I think we do not need valuation in case of Private Placement under Section 42. We need to make it for Preferential Allotment if made under Section 62 (1) (c) and corresponding Rules.