Section 593 valuation (under the CA 2006) meaning

A “section 593 valuation” is the independent valuation report obtained when a UK public company allots shares for non-cash consideration (for example, asset-for-shares, debt capitalisations or share-for-share exchanges). It is a statutory requirement under the Companies Act 2006, s.593, and the expression is widely used in corporate practice. Key features: - Subject to specified exceptions, a public company must procure an independent valuer’s report on the non-cash consideration before the allotment. - The valuer must be independent and eligible to act as the company’s statutory auditor; the report must be prepared in the six months immediately before the allotment and a copy sent to the proposed allottee. - The report must describe and value the consideration and state the method of valuation. Statutory exceptions and anti-avoidance provisions are set out in CA 2006, ss.594–597. Detailed content and timing requirements are in s.593 (read with ss.596–597), with independence/eligibility aligned to the statutory auditor regime in Part 42 CA 2006. These rules apply across England & Wales, Scotland and Northern Ireland. In Ireland, comparable requirements apply to public limited companies under the Companies Act 2014, and practice is broadly consistent. The regime safeguards share capital integrity by ensuring non-cash consideration is properly evidenced and fairly valued.