ROC Search Report
Registrar of Companies (‘ROC’) is created by a legislation, under section 609 of the Companies Act 1956. It works under the administration of the Ministry of Corporate Affairs. Now a day, Banks are more emphasizing on demanding Search Repots from Limited Companies while opening of Bank Accounts or giving the Loan to such Companies. The need for Search Reports arises to keep themselves (Banks) safe and to ensure that the company is not the defaulting one or having not the defaulting directors and to know the complete history and information about the company.
Search Report in context to, Companies under Companies Act, 1956 and Banks, means a report generally prepared by Professional CA/CS/CWA/Advocates about the company after detailed inspection from the records of the Registrar of Companies.
It generally includes:
- Name of Company
- Registered Office Address of the Company
- Capital Structure of the Company
- List of Directors of the company since incorporation
- List of Shareholders of the company since incorporation
- List of Registered Charges since incorporation etc.
- The Report may include the other matters also as per the demand of the Bank Officials.
A search report traces the history of a company or the property held by the company – i.e. who is the original owner of the property and how it has mortgaged with various banks over a period of time before reaching the present Bank who has demanded the Search Report. This is an important part of a loan process by Banks to the Companies. A search report is usually prepared and drafted by Professionals, who after visiting the registrar’s office (Registrar of Companies) and inspecting the property documents, issues the certificate to the Bank stating the facts about the company.
Search Report is mainly beneficial and demanded by following persons/ entities:
By The Banks: Search Report are the basic tool in the hands of the Banks to know about the viability of their customer who approach the banks for CC Limits, Term Loans or otherwise. As the sole moto of the Banks is to provide the loan to the customers is for earning the interest. Hence the Banks want the current position of the assets being pledged by the companies. And the only way to know whether such property is already pledged to some other bank or not, is the Search Report. In such search reports, the Professional gives the complete information about the loans already taken by the company. The basic information given in Search Report about the existing Loans is as follows:
- The date of Loan taken by the company and the charge created in such respect
- The name and Address of the Charge Holders i.e. Bank
- The type of Charge i.e. whether joint charge or consortium Charge
- The Amount of Loan
- The Property Charge/ pledged against such loan
- The Terms and conditions of such loan i.e.
(i) The rate of interest
(ii) Terms of Repayment
(iii) Margin Money
(iv) Extent of Operation
Modification: If the charge has been modified during the continuation of such charge, the details are also provided that on which date the charge had been modified and what was the nature of such modification.
Charge Satisfaction: If any time any charge is satisfied, i.e. the whole amount is paid back by the company to the Bank, Form 17 in respect of Charge Satisfaction is being filed, and the information about such satisfaction is also provided by the Professional in such Search Report, on demand of Banks.
By Shareholders: Shareholders may also demand the Search Repot of the company for the following reasons:
- To now the status of the company
- To know the status of their shares held in the company i.e. how many shares they held, on which date their shares were being transferred, from whom the shares were being transferred
- To know about the Directors in the company
- To know about the complete history as per ROC records since incorporation before investing in such company
- An individual before becoming the Director of the company may get the Search Report prepared from Professional
- To know about the Present Directors of the company
- To know the Assets and Liabilities of the company
- To know about the complete history as per ROC records since incorporation.
Customer and Suppliers
Before entering into any agreement/ contract with the company, the suppliers or the Customers get the Search Report drafted.
Government Authorities like Income TAX Authorities, RBI, SEBI ETC. can also get the Search Report drafted to know the present status of the company and various other financial filed by the company to the concerned Registrar of Companies.