Item: SEARCH REPORT UNDER THE COMPANIES ACT, 2013
Author: Muhammed Fasil K

SEARCH REPORT UNDER THE COMPANIES ACT, 2013

A Search and Status Report as is apparent from, its name contains two aspects. The first being ‘search’ which involves physical inspection of documents and the second activity ‘status’ which comprises of reporting of the information as made available by the search.

Thus a search and status report de facto acts as a ‘Status Report’ on the legal aspects and also a ready reckoner of the exact position of the company on the affairs of the company. In general the Scope of Search report is according to the requirement and purpose of the Report. While issuing the ROC Search report the following process is performed by the professionals.

(a) Examination of documents Registered on MCA 21 portal

The MCA website provides many information relating to the Company. Some information are available without payment of fees like Name of the Company, CIN, Authorised and paid up capital, Name and address of the Directors etc. The website also provides for the viewing of document by public on payment of requisite fee. Public documents include the following:

a. Incorporation documents

b. Certificates, including Incoporation certificate and Charge creation, modification and satisfaction certificates.

c. Charge documents,

d. annual returns and balance sheet,

e. change in directors and other e-forms

However, there are certain documents which are not allowed for public inspection. For example, no person shall be entitled to inspect or obtain copies of the resolutions filed under section 179(3) and rules made thereunder.

MCA-21 offers the facility to view documents and also search and other facilities of public documents. This facility is handy for users and banks and financial institutions while sanctioning loans. This facility enables viewing of public documents of companies for which payment has been made by user. The document can be viewed only within 7 days after the payment has been confirmed. Also, the documents are available for only 3 hours after the user has started viewing the first document of the company-

a. User has to access My MCA portal and login to the My MCA portal.

b. Click on the ‘My Documents’ tab after logging into the system.

c. List of company names will be displayed, for which user have already paid for public viewing. It also displays

· Date of request i.e. the date, when user made the request to view the company document.

· Status of the request i.e. whether viewed or to view.

d. Click on the view link under status field.

e. The documents are grouped under five categories i.e. user has to click on the desired category under which the document falls.

f. If more than one document is listed, the user can arrange them name wise or date wise.

g. On clicking the document name, the document shall be displayed for viewing.

The public documents under this facility are available for viewing by public on payment of requisite fee.

(b) Inspection of Various Documents maintained by the company:

According to the scope of the Search report, the professional should go through the various documents required for the purpose of the report, some the documents which may require are as under:

l Various clauses of Memorandum and Articles of Association

l Forms filed with the Registrar of Companies with receipts.

l All statutory registers.

l Verification of financial statement along with notes to accounts and Auditor Report.

l Report of Internal Auditor.

l Copies of contracts made between the company and any of the related parties

l Transfer and Transmission of Share.

l Instruments creating, modifying or satisfying charges.

l Various Disclosures from Directors

l Related Party Transactions.

l Corporate Social Responsibility (CSR)

l Directors and Key Managerial Personnel (KMP)

(c) Cross Verification of Documents from the MCA Records

Some financial institutions require a Report by Company Secretaries in Practice, on certain additional points relevant and important for them. A separate Report can be given after inspecting or verifying the documents and records available with the Registrar and/or the company. The points normally covered under such Report are:

S.No	Item	Records to be verified
1	Name of the Company	Memorandum of Association Certificate of Incorporation or Fresh Certificate of Incorporation/Change of Name.
2	Date of Incorporation	Certificate of Incorporation
3	Company Number/Corporate Identity Number	Certificate of Incorporation/Fresh Certificate upon change of name/ Certificate of registration of *CLB Order for shifting registered office to another State
4	Address of Registered Office	INC-22, MGT-14 Resolution(s) of Board/ General Body, INC-28 with copy of NCLT Order.
5	Name and address of present directors (with their date of joining)	Articles of Association, DIR-12, Register of Directors
6	Authorized Share Capital of the company divided Into______ Shares of Rs. ___each	Memorandum of Association, SH-7, MGT-14
7	Paid-up Capital of the company divided into ___Shares of Rs. each	MGT-14, PAS-3, Register of Members, Annual Return
8	List of Members with details as to shares held by each of them. The names of directors to be specifically mentioned in such list of shareholders (List of members holding shares of a specified monetary threshold is also asked for in some cases).	PAS-3, Annual Return, Register of Members, Register of Directors.
9	Provision in the Articles of Association as to affixation of common seal of the company. (Particulars as to the persons in whose presence the seal of the company can be affixed to any deed).	Articles of Association. If there is no specific cause and the Articles have adopted Table F, Clause 79 of Table F of Schedule-I of Companies Act, 2013 may be referred.
10	Main Objects of the company.	Memorandum of Association
11	Whether the Articles of the company contains provisions for nomination by the corporation a director on the board of the company.	Articles of Association of the company

Note: If capital is raised other than by cash, it should be shown separately).

Apart from the above, the master data available at the MCA portal can be resorted to mere reproduction of the

particulars of charges in form of Search and Status Report is not sufficient. It also requires:

· A thorough study of the particulars relating to the amount secured by the charge and the terms and conditions governing the charge.

· An analysis of the security available to a particular lender for its advances.

· A comparison of charges created in favour of a particular lender vis-à-vis other lenders.

In other words, it does not necessary mean verbatim reporting of the information as made available but also supplemented by observations/comments by the person who furnishes the Report. In nutshell, while providing search report the following factor should be taken care by the professional:

· The Search and Status Report should give exact details of particulars of charges/modifications/ satisfactions as effected, filed and registered from time to time.

· Identify those charges and modification of charges, which have been created in favour of a particular lender.

· Take the particulars of the documents creating the charge as specified in CHG-1 and CHG-9 under the Companies Act,2013 or Form 8 under the Companies Act,1956

· Ascertain as to whether the amount secured by the charge as per the documents executed has been duly mentioned.

· Ascertain as to whether ‘properties’ offered as security are mentioned as per the documents creating the charge and attached with the Forms and verify whether they are as per the terms of Sanction.

· Check whether the terms and conditions governing the charge have been mentioned.

· Ascertain whether the name of the lender is properly mentioned.

· In case of modification of charge ascertain whether the names of documents effecting the modification are mentioned and whether the particulars of modification are clearly mentioned.

· In case of charge, the particulars of documents attached with forms, amount secured by the charge as per the documents and/or sanction ticket, the properties/assets secured by the charge, the terms and conditions governing the charge and the name of the lender is properly mentioned in the relevant columns of Form CHG-1.

Further, a Search and Status Report should always be supported by expert observations on the charges created by the borrower in respect of the subject lender. It is necessary to peruse the observations/comments offered and the same should be read in conjunction with the Report. The observations/comments of the experts/professional (company secretary in practice) will certainly help to throw additional light on certain points which would have missed the attention of the “lenders” when the Form CHG-1 was presented before them for signature.

(d) Compilation and Preparation of Search Report

Search Report compiled on the basis of the scrutiny of the above documents is, therefore, related and restricted to only those documents which are available for the inspection on the date(s) when the search is carried out.

An index of the charges is prepared at the website of MCA. This index provides, charge ID, the date of filing of the document charge amount secured, name of charge holder and its address. In order to view index of charges, it is primarily necessary to quote CIN/FCRN of the company. This number will primarily be available at the website of the ministry.

It is advisable to note down from the index, the short particulars of all Form CHG-1, 4, 9 for the purpose of cross- checking and ensuring that no document is missed in the Search Report.

Also, it would be advisable to mention in the Search Report by way of a footnote as to what was the last document which was available for inspection when the scrutiny was taken/completed. This information can be helpful in identifying the forms and based on which the Search Report is given.

(e) Format of Search Report and its Preparation

Some of the banks and financial institutions insist that the Search Report be given in their own format. It would, therefore, be advisable to know if any specific format is insisted upon by the client.

E-book on draft resolutions and procedures

SEARCH REPORT UNDER THE COMPANIES ACT, 2013

SEARCH REPORT UNDER THE COMPANIES ACT, 2013

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