When does a company need a net worth certificate in India? (2026)
Last updated: 22 October 2026
Quick Answer: A company needs a net worth certificate only when a regulator, lender, tender authority or overseas investment rule requires one. The Reserve Bank of India (RBI) requires one from payment aggregators at application and by every 30 September. A practising chartered accountant or the statutory auditor signs it with a UDIN; HSAG Consulting lists net worth certification among its services.
What is a net worth certificate? It is a chartered accountant's signed statement of a company's net worth, computed on a stated basis as on a stated date. Each requester, whether RBI, a tender authority or a bank, can prescribe its own formula, so one balance sheet can support more than one certified figure.
Who asks for a net worth certificate: RBI, SEBI, banks or tenders?
Requesters include RBI for payment aggregators, government tender authorities, lending banks and authorised dealer banks reporting overseas investment on Form FC. The Securities and Exchange Board of India (SEBI) also makes net worth a registration condition for some market intermediaries, registrars to an issue and share transfer agents among them.
| Who asks | When it is triggered | What the certificate shows |
|---|---|---|
| RBI, payment aggregator authorisation | At application, then by 30 September every year | Net worth of at least ₹15 crore at application and ₹25 crore by the end of the third financial year of authorisation |
| Government tender authority | At bid submission | The net worth test the tender sets for the financial years it names |
| Bank | For bank finance | Net worth on the basis and date the bank asks for |
| Authorised dealer bank, overseas investment | With each financial commitment on Form FC | The commitment as a percentage of net worth on the last audited balance sheet |
How does section 2(57) of the Companies Act, 2013 define net worth?
Section 2(57) of the Companies Act, 2013 defines net worth as paid-up share capital, all reserves created out of profits, the securities premium account and the debit or credit balance of the profit and loss account. Accumulated losses, deferred expenditure and miscellaneous expenditure not written off are deducted, as per the audited balance sheet.
In the words of the Act, net worth "does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation".
RBI's payment aggregator directions of 15 September 2025 follow its 16 January 2015 circular on computing net worth, count compulsorily convertible preference shares and deduct any deferred tax assets included.
How do RBI rules use net worth certificates?
RBI uses net worth certificates as entry and maintenance tests. Under the payment aggregator directions, an applicant needs ₹15 crore of net worth when it applies and ₹25 crore by the end of the third financial year of authorisation, maintained on an ongoing basis.
The applicant files the Annexure 2.1 certificate from its statutory auditor with the application, and an authorised payment aggregator files an audited net worth certificate by 30 September each year.
How do government tenders test a bidder's net worth?
A government tender can set net worth as a qualifying criterion for named financial years, proved by a CA certificate. The tender document, not a statute, fixes the years, the test and the format.
A tender issued by Invest UP on 9 May 2022 for an event management agency shows the pattern. It required positive net worth for any three consecutive financial years between 2017-18 and 2021-22, supported by a CA or auditor certificate, and it ignored the net worth of sister concerns or affiliates.
Bidders in real estate and construction can keep these workings ready each year end.
Where does net worth matter for bank finance and overseas investment?
Banks ask for net worth certificates for bank finance, and the Institute of Chartered Accountants of India (ICAI) lists that as a certificate type on its UDIN portal. For overseas direct investment, the statutory auditor certifies the company's financial commitment as a percentage of its net worth in Section E of Form FC.
Form FC asks for net worth as on the last audited balance sheet, and its Section E certificate carries the audit firm's registration number and UDIN.
Overseas investors can align these workings with their FEMA and RBI filings, and borrowers can prepare them before debt syndication.
Who can sign a net worth certificate?
A practising chartered accountant signs a net worth certificate, and some requesters insist on the company's own statutory auditor: RBI's payment aggregator directions and Form FC both do. No company can certify its own net worth.
HSAG Consulting lists net worth and turnover certifications among its certification and attestation services; the certificate itself is signed by a chartered accountant in practice.
What is the net worth certificate format for a private limited company?
ICAI offers illustrative formats rather than a single prescribed form. Its Auditing and Assurance Standards Board issued them with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) in September 2016. A private limited company's certificate follows that guidance unless the requester prescribes its own format, as RBI does with Annexure 2.1. The outline and figures below are illustrative only.
| Part | Illustrative content |
|---|---|
| Letterhead | Name and address of the practising chartered accountant or CA firm |
| Addressee | The requester, for example "The Manager, XYZ Bank" |
| Title and entity | "Certificate of net worth" of ABC Private Limited, with its corporate identity number (CIN) |
| Date | Net worth "as on 31 March 2026", the audited balance sheet date |
| Basis of preparation | Section 2(57), from the audited financial statements and books of account |
| Purpose | For submission to the named requester only |
| Signature block | Signature, name, partner or proprietor, membership number, firm registration number (FRN) where a firm signs, UDIN, place and date |
| Illustrative computation as on 31 March 2026 | ₹ lakh |
|---|---|
| Paid-up share capital | 200.00 |
| Securities premium account | 150.00 |
| General reserve created out of profits | 300.00 |
| Credit balance of the profit and loss account | 80.00 |
| Less: miscellaneous expenditure not written off | (10.00) |
| Net worth under section 2(57) | 720.00 |
| Revaluation reserve of ₹120 lakh | Excluded |
How does a company net worth certificate differ from an individual's?
A company's certificate starts from its audited balance sheet, while an individual's starts from a statement of personal assets and liabilities.
| Point | Company | Individual |
|---|---|---|
| Basis | Section 2(57) or the requester's own formula | Assets less liabilities on the stated date; section 2(57) does not apply |
| Typical requesters | RBI, tender authorities, banks, authorised dealer banks | Foreign embassies for visas, lenders for study loans, banks |
| Documents | Audited financial statements, ledgers for capital and reserves | Title documents, bank, investment and loan statements, valuation reports |
| Valuation basis to disclose | Book values in the audited balance sheet | Cost, market value or a valuer's figure for each asset, with its date |
How do you get a net worth certificate, and what documents are needed?
A company gets one by giving a practising chartered accountant the requester's format and the audited figures for the date named, then having the signed certificate carry a UDIN.
- Confirm the requirement. Obtain the requester's format, purpose and "as on" date, and check whether it insists on the statutory auditor.
- Share the figures. Provide the audited financial statements and the ledgers for share capital, securities premium, each reserve and the profit and loss balance. Add any tax audit report the Income-tax Act, 1961 (FY 2025-26 and earlier) or the Income-tax Act, 2025 (from tax year 2026-27) requires (tax audit applicability).
- Flag the exclusions. List accumulated losses, deferred and miscellaneous expenditure not written off, and any revaluation, depreciation write-back or amalgamation reserve.
- Review the draft. Check the entity name, CIN, date, basis and purpose against the requester's format.
- Obtain the UDIN. ICAI made the Unique Document Identification Number (UDIN) mandatory for all certificates from 1 February 2019,. The recipient checks it with the Verify UDIN option on the UDIN portal.
Common Mistakes in Company Net Worth Certificates
The usual errors are matters of basis rather than arithmetic: the wrong definition, the wrong entity or the wrong date. Reading the requester's format first catches most before signing.
- Count a revaluation reserve. Section 2(57) excludes it.
- Apply the Companies Act formula where RBI prescribes its own. RBI's payment aggregator basis deducts any deferred tax assets included.
- Lean on a group company's balance sheet. A tender may ignore sister concerns, and RBI's overseas investment directions no longer let the Indian entity count a holding or subsidiary company's net worth towards its own limit.
- Submit audited accounts in place of the certificate. A tender can ask for both.
- Leave out the UDIN or the date. Without a UDIN, the recipient cannot verify the certificate on ICAI's portal.
What happens after the net worth certificate is issued?
After issue, each requester relies on the certificate as at its stated date and basis. RBI expects payment aggregators to maintain the minimum on an ongoing basis and to file a fresh audited certificate by every 30 September.
In the tender described above, a bidder that failed the net worth criterion was ineligible. For overseas investment, each later commitment is normally reported on Form FC with a fresh statutory auditor's certificate in Section E, so a company that invests abroad in stages needs current workings each time.
Need a net worth certificate for a tender, bank or regulator?
Share the requester's format and your latest audited accounts, and a practising chartered accountant can review the basis before the deadline. Please contact us to discuss the requirement.
