This Article has been written by Ms. Pragati Singh, A Third Year Law Student of Calcutta University, West Bengal
Abstract
A company as we know is a legal entity that is formed to conduct business activities. Its main purpose is to generate profits for its owners or shareholders. Companies can be of different types, such as private limited, public limited, or limited liability partnerships.
On the other hand, the Registrar of Companies (ROC) is a body responsible for registering and regulating companies. The ROC ensures that companies comply with legal requirements, maintain transparency, and protect the interests of stakeholders. They maintain a record of important information about companies and provide access to it. The ROC plays a crucial role in promoting accountability and maintaining the integrity of the corporate sector.
Introduction
Registering a company in India can be quite a complex process. You’re right, it involves various officials like chartered accountants and company secretaries who play a significant role in the registration procedures. But there’s one important entity that often gets overlooked—the Registrar of Companies (RoC). They’re the ones who issue the registration certificate during the incorporation process.
So, what exactly is the RoC? Well, they’re government officials appointed under Section 609 of the Indian Companies Act. Their responsibility is to register all kinds of companies and limited liability partnerships (LLPs) in the respective states and Union Territories. They make sure that these registered companies and LLPs comply with the legislative requirements outlined in the Companies Act.
The Registrar of Companies (ROC) is actually a part of the Ministry of Corporate Affairs in India. Their main job is to handle all the administrative tasks related to companies and LLPs (Limited Liability Partnerships) across different states and union territories. They make sure that companies and LLPs are properly registered and comply with all the legal requirements. The ROCs also keep a record of all the important information and allow people to access it, although there might be a small fee involved. The Central Government appoints Regional Directors to oversee the operations of the ROCs in their respective regions. Currently, there are seven Regional Directors who make sure everything is running smoothly. It’s a really important organization that helps maintain transparency and efficiency in the corporate world of India
Meaning and Scope of Registrar of Companies (ROC)
The Registrar of Companies (ROC), as defined under Sub-Section 75 of Section 2 of the Companies Act, 2013, is an appointment of the Ministry of Corporate Affairs. Their main role is to regulate Indian enterprises in the Industrial and Services Sector. Currently, there are 22 Registrars of Companies located in major states across India. The ROCs have various functions and powers under the Companies Act of 1956 and Companies Act of 2013. They are responsible for fostering business ethics and facilitating a positive business culture. The ROCs primarily register companies in their respective states and union territories, but they also have additional responsibilities. The Central Government exercises control over the ROCs through Regional Directors who oversee different regions comprising multiple states and union territories. It’s a vital role in ensuring the smooth functioning and ethical conduct of businesses in India.
Why is ROC important?
The Registrar of Companies (ROC) is important because it plays a crucial role in promoting trust and transparency in the Indian corporate world. It ensures that companies comply with regulations and provides public access to information, which builds trust among investors and contributes to economic growth. The ROC not only protects stakeholders by monitoring the day to activities of the company but also helps in preventing fraud, and creating a stability. Additionally, the ROC facilitates business growth by offering a streamlined registration process and clear regulations, making it easier for businesses to set up and operate in India. So, the ROC is pretty important for a healthy business ecosystem.
Registration of Company under ROC:
When a company wants to operate legally in India, it needs to register with the Registrar of Companies (ROC). The ROC issues a certificate of incorporation to the company, confirming its successful registration. To register, the company must submit various legal documents like the Memorandum of Association (MoA) and the Articles of Association (AoA) to the ROC. The company also needs to provide a pre-incorporation form for the appointment of managing directors and directors, along with a document stating that all the legal requirements and documents are complete. Once the ROC authenticates and verifies the company’s documents, they issue a certificate of incorporation and register the company’s name in their records. It’s an important step to ensure the company’s legal compliance in India.
Refusal for registration of Company by ROC:
The Registrar of Companies in India has the authority to refuse the incorporation of a company for various reasons. If the Registrar finds any issues with the clauses mentioned in the Memorandum of Association, such as the company’s name, objectives, registered office, capital, or liability, they may refuse to incorporate the company. If the company’s objectives appear to be unlawful, the Registrar is obligated to reject the registration. It’s important for companies to ensure compliance and adhere to the guidelines set by the Registrar to successfully incorporate in India.
Resolution provisions of ROC:
According to Section 117 of the Companies Act of 2013, it is mandatory for companies to file every resolution passed within 30 days with the registrar. The Registrar of Companies has the responsibility to record all these resolutions. The Companies Act also specifies penalties and fines for companies that fail to file resolutions within the given time frame. Essentially, companies need to inform the ROC about any activities related to changes in directors or managing directors, issuing a prospectus, appointing sole-selling agents, or voluntary winding up, among other things. It’s important for companies to comply with these regulations to ensure transparency and legal adherence.
Powers of the Registrar of Companies
The Registrar of Companies has various powers and responsibilities related to the registration, mortgage and charges, inspection, inquiry, and investigation of companies under the Companies Act.
- Incorporation of Company and Certificate of Incorporation: The Registrar is responsible for granting the certificate of incorporation to a company formed under Section 3 of the Companies Act. The certificate of incorporation is conclusive evidence that all requirements for registration have been complied with.
- Power of Registrar to make entries of satisfaction and release without intimation from the company (Section 83): The Registrar can make entries of satisfaction in the register without intimation from the company if evidence is provided that the debt for which a charge was given has been paid or satisfied, or if part of the property charged has been released.
- Powers Related to Inspection, Inquiry, and Investigation:
– Power to call for information, inspect books, and conduct inquiries (Section 206): The Registrar can require a company to provide information, explanation, or documents if there are concerns about compliance or fraudulent activities.
– Search and Seizure (Section 209): The Registrar can obtain an order from the Special Court for the seizure of company books and papers if there is reason to believe they may be altered, falsified, or destroyed.
- Power of Registrar to Remove Name from Register of Companies (Section 248): The Registrar can strike off the name of a company from the register if there are reasonable causes to believe that the company has not commenced business within one year of incorporation, or if subscribers have not paid subscription money as required.
The company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under Section 455.
In such cases, the Registrar may send a notice to the company and all its directors informing them of his intention to remove the name of the company from the register. If no response is received within 30 days, the Registrar may strike off the name of the company from the register and publish a notice in the Official Gazette.
These powers enable the Registrar to ensure compliance with the Companies Act and maintain transparency and accountability in the functioning of companies.
Functions of the Registrar of Companies
The Registrar of Companies (ROC) plays a critical role in ensuring compliance with statutory requirements under the Companies Act, 2013. One of the key areas where the ROC exercises its functions is in relation to the registration of mortgage charges. A charge, as defined in Section 2(16) of the Act, includes an interest or lien created on the property or assets of a company as security, which also encompasses a mortgage.
Section 77 of the Companies Act outlines the registration process for charges created by companies. It mandates that every company creating a charge must register the particulars of the charge with the ROC. This registration applies to charges on company property or assets, whether tangible or intangible, located within or outside India. The company is required to file the instrument of charge in the prescribed form and pay the requisite fee within 30 days of creating the charge. The ROC has the authority to allow registration within an extended period of 300 days upon payment of an additional fee. Once registered, the ROC issues a certificate of registration to both the company and the charge holder.
In cases where a company fails to register a charge, Section 78 allows the charge holder to apply to the ROC for registration along with the relevant instrument. The ROC then notifies the company to provide reasons for the non-registration, and if no valid reasons are given within 14 days, the charge is registered upon payment of the prescribed fee.
Furthermore, Section 81 requires the ROC to maintain a register of charges for every company, containing details of all charges registered under the Act. This register is open for inspection by any person upon payment of a fee. Companies are obligated to furnish necessary particulars to the ROC in the prescribed form and fee. The register maintained by the ROC should include information such as the date of charge creation, amount secured, property covered, and parties entitled to the charge.
Apart from overseeing mortgage charges, the ROC also ensures compliance with various statutory requirements under the Companies Act. This includes monitoring the periodic filing of Annual Returns and Balance Sheets, overseeing changes in directorship, and registering companies incorporated in different states and Union Territories.
Under Section 93 of the Act, listed companies are required to file a return with the ROC in case there is a change in the shareholding of promoters and the top 10 shareholders. This return must be submitted within 15 days of such a change. Additionally, Section 137 mandates companies to file their financial statements, which typically consist of a balance sheet and profit and loss account (or income and expenditure account for non-profit entities) for the financial year.
In conclusion, the functions performed by the ROC in relation to mortgage charges and compliance with statutory requirements are essential for ensuring transparency, accountability, and regulatory adherence within the corporate sector. By upholding these provisions, the ROC plays a crucial role in safeguarding the interests of stakeholders and maintaining the integrity of company operations.
The Registrar of Companies plays a crucial role in ensuring compliance with statutory requirements under the Companies Act, particularly in relation to mortgage charges and other obligations. Here are some key functions related to compliance with statutory requirements:
As per Section 93 Return to be filed with Registar in case promoter’s stake changes . Listed companies are required to file a return with the Registrar in the prescribed form regarding any change in the number of shares held by promoters and the top 10 shareholders of the company. This return must be submitted within 15 days of the occurrence of such a change.
As per Section 137 Copy of Financial Statements to be filed with the ROC .This section mandates the filing of financial statements and outlines penalty provisions for non-compliance. A financial statement typically includes a balance sheet as of the end of the financial year and a profit and loss account (or an income and expenditure account for non-profit companies) for the financial year.
These provisions ensure transparency and accountability in the financial reporting of companies, as well as help in monitoring changes in shareholding patterns among promoters and top shareholders. The Registrar’s oversight in these areas is essential for maintaining regulatory compliance and protecting the interests of stakeholders.
Conclusion
The office of the Registrar of Companies under the Ministry of Corporate Affairs has been vested with a large number of duties and is empowered to perform various functions by virtue of the provisions of the Companies Act, 2013.
The Registrar of Companies (ROC) has various functions and powers as per the Companies Act. Some of the functions of the ROC include issuing certificates of registration of charge, maintaining the register of charges, receiving returns on changes in promoters’ stake, filing of financial statements, and informing the Registrar of the Identification Number. The ROC also has powers such as the registration of companies, making entries of satisfaction and release, calling for information, conducting inquiries, and the power of search and seizure. These functions and powers help ensure compliance, transparency, and accountability in the corporate sector.
References:
https://blog.ipleaders.in/power-functions-registrar-of-companies/
https://cleartax.in/s/roc-registrar-of-companies-india
https://especia.co.in/post/registrar-of-companies/
https://www.legalraasta.com/blog/registrar-of-companies-roc-india/
https://housing.com/news/roc-registrar-of-companies/
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