Section 609 of the Companies Act in India appoints the Registrars of Companies (ROC). ROC comes under the Ministry of Corporate Affairs (MCA). All new companies have to comply with the rules and regulations of the Registrar of Companies ( ROC ) India. It is operational across India's states and the Union territories of India. The registrar of firms furnishes you with the key details of almost every commercial entity registered across India. These details can be made available to the public after paying the fee indicated by the ROC.
In India, every business must obtain prior approval from the registrar of firms. This assists the government, and the ROC get an insight into whether the organisation's operations are in sync with the guidelines of the 2013 Companies Act during a specific financial year. It is important to note that a Company Registration Number (CRN) applies to limited and limited liability partnership businesses only. This number is referred to as the registration or company number as well.
Did you know?
India has 25 Registrars of Companies (ROC) functioning across various states.
What Is the Registrar of Firms in India?
The Companies Act, 2013, the Limited Liability Partnership Act, 2008, the Company Secretaries Act, 1980, and the Chartered Accountants Act, 1949 are all administered by the Registrar of Companies (ROC), which is part of the Indian Ministry of Corporate Affairs. Registrars of Companies (ROCs) appointed under Section 609 of the Companies Act for the various states and union territories are charged with the primary responsibility of registering companies and limited liability partnerships (LLPs) formed in those states and union territories and ensuring that they comply with the Act's statutory requirements. These offices serve as a repository for records connected to the companies that have registered with them, which are available for public examination for a fee. Through the Regional Directors, the Central Government exercises administrative supervision over these offices.
Also Read: A Guide on Company Registration Process
What Are the Various Functions of ROC?
The India Companies Registrar monitors the registration of every commercial business that needs a Company Registration Number. This is the procedure of incorporation. Approval of the ROC is crucial for the said business to start operations. A company can obtain an incorporation certificate only after registering it with the ROC. In case of closure for multiple reasons, the owners or founders of the business have to inform the ROC, which eliminates the business's name from the registrar. Once an organisation does this, the company is considered non-existent.
- All documents presented by a business registered with the ROC are scrutinised to understand if the company complies with the rules of the ROC. The registrar of firms has to share all details of the respective directors and the shareholders of the businesses with the said government officials.
- The registrar of companies facilitates ethical business ethos among the various member organisations registered with it.
If the ROC finds any irregularities within a registered business, it is authorised to file a petition demanding for complete closure of the company. The Registrar of Companies in India has the authority to demand additional information from the businesses registered with it. This includes seeking more details from the books of accounts of the enterprises.
If the ROC suspects foul play or wrong activities in any of the organisations, it can demand an investigation of the entire office premises. After you incorporate an organisation with the ROC, it has to furnish the ROC with any changes within the organisation. This could include changes in the hierarchy, expansion and diversification activities or even a change in the location.
Jurisdiction of the ROC
The jurisdiction of the Registrars of Companies (ROC) in India is as follows:
- It enables organisations to get registered (limited and limited liability partnership).
- Section 206 of the 2013 Companies Act empowers the ROC to inspect the various financial books of an organisation if the situation demands it. If the ROC suspects irregularities in the organisation's function, they can ask for an inspection of specific documents.
- ROC can also demand to inspect the official premises of organisations if it finds out that the registered businesses are not in compliance with the guidelines of the 2013 Companies Act.
- Suppose the registered businesses are suspected of furnishing wrong information in their books of account, then Under Section 209 of the 2013 Companies Act. In that case, the ROC can seize all the essential books of the organisation for inspection. The registrar of firms can scan such documents or books.
Under Section 248 of the 2013 Companies Act, there are various conditions whereby the ROC can eliminate the business name from the Registrar of Companies. Some of these are as follows:
- If a business has not officially started operations within 12 months after being incorporated.
- A business has failed to make a payment of the subscription fee. This fee should be paid within six months, starting from the date of the incorporation of the business.
- If an organisation has failed to start operations for two preceding financial years, it is supposed to apply for the status of a dormant business under Section 455 of the Companies Act. If it does not, the ROC will remove its name from the Register of Companies.
The ROC has to intimate the organisations with a legal notice. The notice addresses the directors on removing the organisation's name. The said business will have to send its relevant personnel to the ROC within 30 days of the notice. If a business has failed in its operations, it can also apply to the ROC for the same.
A mutual agreement must be documented by at least 3/4th of its members regarding financial details. The organisation forwards it to the ROC. The ROC furnishes a public notice in the more significant interests of the public. As per the details mentioned in the notice, it then removes the business's name from the Registrar of Companies. It is obligatory to publish the said details in the official gazette for everyone to understand the dissolution of the said business.
Company Registration by the ROC
The process for company registration by ROC is as follows:
A privately-held business has to include a minimum of 2 directors. Applications to be made are as follows:
Step 1: Application for the Digital Signature Certificate
The concerned authority issues this certificate and enables electronic signatures. The details required include the details of the directors and their relevant information with 2-3 photographs. This certificate has a validity of 12-24 months, and you should renew it from the Controller of Certification Agencies (CCA). The payment for obtaining such a certificate varies across businesses and depends on the companies' structure.
Step 2: Make an Application for the Director Identification Number
This requires furnishing all personal details like name, postal address of the premises and copies of the PAN cards of both the directors. You can access the DIN-1 form on the official website of the Ministry of Corporate Affairs. The required sum of application fees has to be paid online after the business founders complete the formalities.
Step 3: Make an Application for the Organisation's Name
It is important to note that the name is original, unique and representative of the goods that the business plans to manufacture. The Ministry of Corporate Affairs has a facility to access some unique names (Reserve Unique Name), which an organisation can use. If the business decides on a similar name to an already existing name, it will not be able to use this service again. All the rules mentioned on the website have to be adhered to accordingly.
Step 4: Charter Documents
This includes Articles of Association and Memorandum of Association. The former includes all the relevant details of the entire management of the business, and it details the guidelines and regulations of the company's internal affairs. The latter showcases the goals and vision of the business and other relevant details.
Step 5: Application for Permanent Account Number and Tax Account Number
Once businesses procure the PAN and TAN numbers from the authorising entities, the ROC grants an incorporation certificate to them.
ROC Refusal for Company Registration
The ROC can refuse to register a business for various reasons.
- A business with a name that is considered objectionable.
- If the company's goals or vision are ambiguous and not in sync with the laws of the country.
- If it cannot furnish details of its finance and sources of revenue to operate the business.
Role of ROC After the Registration of a Company
Once a business entity gets registered, the ROC still has the right to monitor the business under the following conditions:
- If the company follows wrong activities.
- If the ROC finds discrepancies in the official books of accounts of the business.
- IF the company gives the ROC information regarding the shareholders or other internal affairs of the corporation.
- If the business fails to comply with the guidelines stated in the 2013 Companies Act of India.
Filing Resolutions With ROC
Section 117 of the 2013 Companies Act states that the Registrar of Companies must maintain a record of each resolution passed by the businesses. This could include a buyback of the business shares, issuance of sweat equity shares, removal of an auditor before the said removal date, and other aspects. Businesses which do not file the requisite resolutions will be liable to pay a fine. All the companies must inform the ROC about their various activities regarding internal changes as per the timelines or face the consequences of penalties.
Also Read: What is Certificate of Incorporation?
Filing Forms With ROC
There are three types of forms with ROC by businesses. These are:
1. Form MGT 7
This includes details of all changes, e.g. in appointment or exit of directors, details regarding share transfers during the financial year, and the details of the shareholders.
2. Form AOC4
This includes furnishing details regarding the profit and loss account, debts if any, balance sheet of the company, certificate of compliance and the proof of the registered address of the business.
3. Form ADT 1
This includes the details for appointing an auditor for the business. The dates for filing the above forms are available on the official website.
Conclusion
This article gives detailed information on the Registrar of Companies (ROC) and how it plays a vital role in the registration process of a new business. It also details the powers vested in the ROC and how it can use those powers on the grounds of suspicion of objectionable activities of a company.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.
