Companies Act Section 2(38) Expert

Expert Section 2(38)

An "Expert" is someone with authority to provide opinions or advice in their field of expertise, often offering specialized knowledge or professional judgment.

Roles and Responsibilities:

1. Technical Expertise: 

Experts may include professionals such as chartered accountants, lawyers, engineers, valuers, or other individuals with specific qualifications and experience relevant to the matter under consideration.

2. Appointment by the Board: 

Companies may appoint experts to provide opinions, reports, or advice on various matters, including financial audits, valuations, legal compliance, technical assessments, or other specialized areas requiring expert judgment.

3. Scope of Expert Opinion:

Experts play a critical role in corporate decision-making and governance by offering unbiased and informed opinions that assist boards of directors and management in making well-informed decisions.

Examples of Expert Roles:

1. Statutory Auditor: 

A chartered accountant appointed to audit the company’s financial statements and provide an independent opinion on its financial health and compliance with accounting standards.

2. Valuation Expert: 

Appointed to determine the fair market value of assets, shares, or businesses for purposes such as mergers and acquisitions, capital restructuring, or regulatory compliance.

3. Legal Advisor: 

Provides legal opinions and advice on corporate governance, compliance with laws and regulations, contractual matters, and litigation management.

Legal Framework and Compliance:

1. Companies Act, 2013: 

The appointment, roles, responsibilities, and qualifications of experts are governed by provisions under the Companies Act, 2013, and rules framed thereunder.

2. Disclosure Requirements: 

Companies must disclose in their financial statements and other regulatory filings any opinions, reports, or advice provided by experts, along with the basis of their appointment and qualifications.

3. Professional Standards: 

Experts are expected to adhere to professional standards, ethical guidelines, and regulatory requirements applicable to their respective fields of expertise when providing opinions or advice to companies.

Importance and Accountability:

1. Independent Oversight: 

Experts contribute to transparency and accountability in corporate operations by offering independent assessments and recommendations based on their professional expertise.

2. Risk Management: 

Expert opinions help mitigate risks associated with complex financial, legal, or technical decisions, ensuring that companies comply with regulatory requirements and make informed strategic choices.

3. Enhancing Corporate Governance: 

By leveraging expert advice, boards of directors can enhance their decision-making processes, strengthen internal controls, and uphold high standards of corporate governance.