# Business & Share Valuation

> A valuation estimates what a business or its shares are worth using methods such as discounted cash flow, comparable companies or transactions, and net asset value. Different laws need valuations for different purposes — share issues to residents (Companies Act, by a registered valuer), issues or transfers involving non-residents (FEMA pricing guidelines), tax (Rule 11UA), ESOPs and mergers — and each prescribes who may sign and which methods are acceptable.

Practice: Corporate Finance & Valuation — https://www.industax.com/services/corporate-finance/

The same company can need several valuations for one round: a registered valuer's report for the Companies Act, a FEMA-compliant report for foreign investors, and a merchant banker's report for tax purposes where required. Planning them together keeps the numbers consistent.

Our team builds the models and business plan; reports that must be signed by a registered valuer or SEBI-registered merchant banker are issued by our partner professionals.

## Key facts

| Item | Detail |
| --- | --- |
| Methods | DCF, comparables, net asset value |
| Companies Act | Registered valuer for share issues |
| FEMA | Arm's length price per internationally accepted methods |
| Income tax | Rule 11UA where applicable |

## Who needs this

- Startups raising capital
- Companies issuing ESOPs
- Buyers and sellers in transactions

## What's included

- Financial model and assumptions
- Valuation analysis
- Report via registered valuer where needed

## Documents

- Financial statements and projections
- Cap table
- Business plan

## Process

1. **Model** — Projections and assumptions agreed.
2. **Value** — Methods applied and reconciled.
3. **Report** — Signed report issued.

Work that legally requires a registered valuer is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Who can sign a valuation report for a share allotment?

Under the Companies Act, a registered valuer registered with IBBI. For certain FEMA and tax purposes, a chartered accountant or SEBI-registered merchant banker may sign, depending on the case.

### Is angel tax still relevant?

No. The angel tax provision taxing share premium above fair value was abolished from AY 2025-26, but valuations are still required under the Companies Act and FEMA.

### How long is a valuation report valid?

Practice and some rules expect the valuation date to be close to the transaction — often within 90 days for FEMA pricing.

## Official sources

- IBBI — Registered Valuers: https://ibbi.gov.in/
- incometaxindia.gov.in — valuation rules: https://www.incometaxindia.gov.in/
- Reserve Bank of India: https://www.rbi.org.in/

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Canonical page: https://www.industax.com/services/corporate-finance/business-valuation
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.