Companies Act 2014 section 492

Expert's report

Section 492 sets out the requirements for appointing an independent expert to examine and report on the common draft terms of a company division, including who may be appointed, what the report must contain, and when the requirement may be dispensed with.

• An independent expert (who must be a statutory auditor with no conflicts of interest) must be appointed to examine the common draft terms of division and report to shareholders, unless all members agree the report is unnecessary, or a successor company already holds 90% or more of the transferor's voting shares
• The expert's written report must be available at least 30 days before the shareholder vote and must address the share exchange ratio, its fairness, the valuation methods used, the values produced, and any special valuation difficulties encountered
• The expert has the power to require information and explanations from each company and its officers; failure to comply, or providing false or misleading information, is a criminal offence
• The entire section does not apply where a division creates new companies and the shares in each successor company are allocated to the transferor company's shareholders in proportion to their existing capital rights

---