Sec 56

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swasti (Querist)
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26 June 2012 Is it required for a company to take the certificate from a CA for calculating FMV of unlisted equity shares for the purpose of Sec 56? Or a company can itself make calculations for FMV of shares as on the date of issue?

CA. SUDHARSAN K G

CA. SUDHARSAN K G (Expert)
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26 June 2012 The fair market value of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner, namely:

[Assets-Liabilities]x[Paidup value of such shares/paidup value of Equity]

The fair market value of unquoted shares and securities other than equity shares in a company which are not listed in any recognized stock exchange shall be estimated to be price it would fetch if sold in the open market on the valuation date and the assessee may obtain a report from a merchant banker or an accountant in respect of such valuation.]

Summary: If it is unquoted equity share, certificate is not required otherwise required.

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swasti

swasti (Querist)
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27 June 2012 Thanks a lot Mr. Sudarshan. Can you also give advise regarding that suppose the company is issuing the shares in the middle of the year, then is it necessary to draw the balance sheet of the company on that date and also to be certified by a CA.

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