Module_6_22_

COMPANY LAW AND
COMPLIANCES

CERTIFICATE COURSE

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DEVELOPED BY

MODULE - 6

AUTHORITIES UNDER THE COMPANIES
ACT, 2013

6.1 Introduction 6.2 Registrar of Companies (ROC)

The Companies Act, 2013 provides for the The Companies Act, 2013 defines registrar as a
following authorities apart from the courts to registrar, an additional registrar, a joint registrar, a
regulate the companies. Those authorities under deputy registrar or an assistant director under
the Companies Act, 2013 include: Section 2(75). Section 396 of the Companies
empowers the Central Government to establish
● Registrar of Companies( ROC) - The primary registration offices for the purpose of registration
regulatory authorities for the companies. of companies and exercise other powers and
functions so specified under the Companies Act,
● Regional Director (R.D) - Some of the 2013. The Central Government also appoints the
regulatory powers of the Central registrars, additional registrar, a joint registrar, a
government is delegated to the regional deputy registrar or an assistant registrar as may be
director. necessary and define their jurisdiction.

● National Financial Reporting Authority 6.2.1 Duties of Registrar
(NFRA)
One of the important duties of the Registrar after
● Serious Fraud Investigation Office (SFIO) receiving the documents by companies for
● National Company Law Tribunal registration is to examine the documents and the
● National Company Law Appellate Tribunal validity of the documents which is required by the
● Special Authorities act. If any of the documents are found to be
defective or incomplete the ROC has to direct the
All these authorities have their own specific role to companies to rectify such defect within fifteen
play in regulating and keep a check on the
functioning of the Companies.

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days. The registrar will not register, record or file books of account or any other documents where
such document until the defects are rectified and the ROC has reasonable grounds to believe that
such fees is paid. If any of the document which is so such documents may be destroyed, altered,
filed by the companies are invalidated then such falsified or secreted. Section 248 of the Companies
documents has to be rectified by the person or act empowers the ROC to strike the company’s
company only by making a fresh filing with the name from the Register of Companies after
registrar with payment of fees. complying with the procedure as laid down by this
section.
6.2.2 Powers of the Registrar
6.3 National Financial Reporting Authority
The Companies Act, 2013 and the Central (NFRA)
government empowers the registrar with certain
powers and functions. The Central Government The Central government is authorised to
has delegated some powers to the Registrar under constitute the NFRA as the apex body governing
sections 4(2), 8(1), 8(4)(i), 8(5) and section 13(2) of the various matters relating to accounting and
the Companies Act 2013. Section 96 of the auditing standards.
Companies Act empowers to the ROC to extend
the time period within which the Annual General 6.3.1 Role of NFRA:i
Meeting should be held and such period should not
exceed more than 3 months. ● Making Recommendations to the Central
Government regarding formulation and
Section 206 and section 207 of the Companies Act laying down of accounting and auditing
empowers the ROC to call for books of Account, policies and standards to be adopted by
other records and papers of every company. companies or class of companies or their
Further, the ROC can call on the company by a auditors.
written order to furnish such information,
clarification and explanations for any of the ● Monitoring and enforcing compliance with
documents so filed with the ROC. Section 209 of accounting standards and auditing
the Companies Act empowers the ROC to apply to standards.
the special court for an order for the seizure of the
● Overseeing the quality of service of the
professions associated with ensuring
compliance with such standards. NFRA

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sha;; also suggest measures required for ○ inspection of any books. registers and
improvement in quality of service. other documents of any person at any
place.
6.3.2 Power and Functions of NFRA
○ issuing commissions for examination
Section 132(4) of the Companies Act 2013 of witnesses or documents.
specifies the powers and functions of NFRA for
effective discharge of its duties. The Act specifies ● Where professional or other misconduct is
that: proved, have the power to make order for
imposing penalty which is not less than one
● Have the power to investigate,either suo lakh rupees and may extend upto five times
moto or on a reference made to it by the the fees received in case of individuals and
Central Government, for such class of bodies not less than five lakhs and may extend upto
corporate or persons, in such manner as may ten times of the fees received in case of
be prescribed into the matters of firms.
professional or other misconduct committed
by any member or firm of chartered 6.3.3 Constitution of NFRA
accountants, registered under the
Chartered Accounts Act, 1949. The NFRA consists of a Chairman and not more
than fifteen other members who may be either full-
● Have the same powers as are vested in a civil time or part-time. The Chairman is appointed by
court under the Code of Civil Procedure, the Central Government and such chairman shall
1908 while trying a suit, in respect of have expertise in accountancy, auditing, finance or
matters namely; law.
○ Discovery and production of books of
accounts and other documents, at 6.4 National Company Law Tribunal and National
such place and at such time as may be Company Law Appellate Tribunal
specified by the NFRA.
○ Summoning and enforcing the Section 408 and section 410 of the Companies
attendance of persons and examining Act, 2013 empowers the Central Government to
them on oath. constitute by notification ‘the National Company
Law Tribunal (NCLT)’ and ‘the National Company

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Law Appellate Tribunal (NCLAT)’ consisting of a of a High Court for five years.ii Judicial members
president and such members of judicial and shall be a person who is or has been a judge of the
technical members as the Central Government High Court, or is or has been a district judge for at
may deem fit to exercise and discharge such least five years or has for at least ten years been an
powers and functions as are conferred on it by or advocate of a court.iii
under the Companies Act or any other law for the
time being in force. The Central Government has Technical members of NCLT shall be a person
the power to constitute such benches of NCLT who:iv
throughout the country where it deems fit. The
Principal Bench of the NCLT is at the National A. has, for at least fifteen years been a
Capital Region New Delhi. Each of such benches member of the Indian Corporate Law
shall consist of two members out of which one is a Service or Indian Legal Service out of which
judicial person and the other shall be a technical at least three years shall be in the pay scale
person. of Joint Secretary to the Government of
India or equivalent or above in that service;
The NCLT started functioning on the 1st of June, or
2016 with two benches at New Delhi out of which
one is the principal bench of NCLT, and one bench B. is, or has been, in practice as a chartered
at Ahmedabad, Allahabad, Bengaluru, Chandigarh, accountant for at least fifteen years; or
Chennai, Guwahati, Hyderabad, Kolkata, and
Mumbai. C. is, or has been, in practice as a cost
accountant for at least fifteen years; or
6.4.1 Qualifications of president and other
members of the NCLT [Section 409] D. is, or has been, in practice as a company
secretary for at least fifteen years; or
The qualification for the president and other
members of the NCLT is provided under section E. is a person of proven ability, integrity and
409 of the Companies Act. The President of the standing having special knowledge and
NCLT shall be a person who is or has been a judge experience, of not less than fifteen years, in
law, industrial finance, industrial
management or administration, industrial
reconstruction, investment, accountancy,
labour matters, or such other disciplines
related to management, conduct of affairs,

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revival, rehabilitation and winding up of 6.4.4 National Company Law Appellate Tribunal
companies.
Section 410 of the Companies Act, empowers the
6.4.2 Civil Court not to have jurisdiction [Section Central Government to constitute the National
430] Company Law Appellate Tribunal. The NCLAT has
jurisdiction to hear appeals against the order of the
No civil court in the country shall have jurisdiction NCLT, or the National Financial Reporting
to entertain any suit or proceedings in respect of Authority under the Companies Act and any
any matter which the NCLT or the NCLAT is directions, decision or ordered referred to in
empowered to determine under this act or any section 53N of the Competition Act, 2002 in
other law for the time being in force. No civil court accordance with the provisions of that act.
shall be competent to grant an injunction in
respect of any action taken or to be taken in 6.4.5 Qualification of Chairperson and Members
pursuance of any power conferred by the of NCLAT [Section 411]
Companies Act, 2013 by the NCLT or NCLAT.
The chairperson shall be a person who is or has
6.4.3 Expeditious disposal by Tribunal and
Appellate Tribunal [Section 422] been a Judge of the Supreme Court or the Chief

Every application or petition filed before the Justice of the High Court. A Judicial Member shall
Tribunal or appeal before the Appellate Tribunal
shall be dealt with and disposed of within months be a person who is or has been a Judge of a High
from the date of its presentation before the
Tribunal or the filing of appeal before the Appellate Court or is a Judicial Member of the Tribunal for
Tribunal. If it is not disposed of within three
months. The President of the NCLT or the five years. A Technical Member shall be a person of
Chairperson of the NCLAT may extend the time for
a period not exceeding ninety days as he may proven ability, integrity and standing having
consider necessary.
special knowledge and experience, of not less than

twenty-five years, in law, industrial finance,

industrial management or administration,

industrial reconstruction, investment,

accountancy, labour matters, or such other

disciplines related to management, conduct of

affairs, revival, rehabilitation and winding up of

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companies. 6.5 Serious Fraud Investigation Office [SFIO]

6.4.6 Powers of NCLT and NCLAT Section 211 of the Companies Act, 2013 provides
for the establishment of Serious Fraud
● Powers as a civil court under the Code of Investigation Office. The Central Government by
Civil Procedure, 1908: The Tribunals can notification shall establish an office to be called
summon and enforce the attendance of any Serious Fraud Investigation Office to investigate
person and examining him on oath, frauds related to a company. The SFIO was
requiring the discovery and production of established by the Central Government vide its
documents. Receiving evidence on resolution number 45011/16/2003 dated 2nd
affidavits. July, 2003. But, for the purposes of this act SFIO is
designated with effect from 21st July, 2015.
● Execution of an order.
● Power to punish for contempt: Section 425 6.5.1 Role of SFIO

of the Companies Act, 2013 empowers and As section 211(1) specifies that SFIO primary role
authorizes the tribunal to punish for is to investigate frauds related to companies.
contempt as the High Court under the Section 212(1) of the Act empowers the SFIO to be
provisions of the Contempt of Court Act, the investigation authority to investigate into the
1970. affairs of Company. The Central Government may
● Power to seek assistance of Chief assign the SFIO to investigate into the affairs of a
Metropolitan Magistrate etc.: Section 429 company:
of the Companies Act provides that in any
proceedings for winding up of a company ● On receipt of a report of the Registrar or
under this act or any proceedings under the inspector under section 208.
Insolvency and Bankruptcy Act, 2016, the
Tribunal can seek the help of the Chief ● On intimation of a special resolution passed
Metropolitan Magistrate, Chief Judicial by a company that its affairs are required to
Magistrate or the District Collector for the be investigated.
purpose to taking custody of records,
books of account, or any other document. ● In the public interest; or
● On request from any department of the

Central Government or a State Govt.

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The SFIO can take up investigation under any of records in respect of such offences under
the circumstances mentioned above and it cannot this Act to SFIO.
start investigation suo moto. ● Section 217 of the Act prescribes that the
investigating officers shall have such powers
6.5.2 Constitution of SFIO [Section 211(2)] of an inspector.
● The SFIO has the power to seek information,
The SFIO shall be headed by a director, who is not explanations and assistance from the
below the rank of Joint Secretary to the company, its officers, and employees during
Government of India and such number of experts the conduct of investigation.
from the following fields of banking, corporate ● The SFIO has the power to arrest any person
affairs, taxation, forensic audit, capital market, who it believes to be guilty of a specific
information technology, law or such other fields as offence by informing him the grounds for
may be prescribed. These experts are appointed by such arrest. The specific offences are those
the Central Government. which are covered under section 447 of the
Act.
6.5.3 Powers of SFIO ● The offences so specified under the
Companies Act 2013 shall be cognizable and
Section 212 of the Companies Act, envisages the no person accused of such offences shall be
powers of the SFIO: released on bail or on his own bond unless
the public prosecutor has been given an
● The SFIO has exclusive jurisdiction in the opportunity to oppose the application for
investigation of the cases which are assigned such release and where the public
to the SFIO by the Central Government and prosecutor opposes the application, the
no other investigation agency of the Central court is satisfied that there are reasonable
Government or State Government shall grounds for believing that he is not guilty of
proceed with investigation in such cases in such offence and that he is not likely to
respect of any offence under this Act and in commit any offence while on bail.
case any such investigation has already been ● Any other investigating agency including
initiated, it shall not be proceeded with any
further with and the concerned agency shall State Government, police, income tax
transfer the relevant documents and

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authorities etc. having any information SFIO. The SFIO has a similar duty towards
with respect to the offence which is being the other department.
investigated by the SFIO are under an
obligation to provide such information to

i Section 132(2) of the Companies Act, 2013. iii Section 409(2) of the Companies Act, 2013.
ii Section 409(1) of the Companies Act, 2013. ivSection 409(3) of the Companies Act, 2013.

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