Hopefully, with the advent of the new company
law, presuming the Bill becomes an Act, there will be a perceptible
change in the manner in which companies and ROC function that should
lead to a more efficient and user-friendly system
Till date, there are lakhs of manual records of companies kept under the Companies Act, 1956. This mode continues to this day and has failed to keep pace with the modern times. Hopefully, very soon this scenario will change when the Companies Bill, 2012 (the Bill)
will become the new law.
At the same time, it needs to be mentioned that the ministry of corporate affairs (MCA) was amongst the first ministries to initiate the move for digitisation of manual records. Even the returns and forms filed periodically are stored in electronic format. After the initial teething troubles, the MCA21, as the system is called, is now well settled and has become a source of great convenience not only to the companies that have to do the filings periodically, but also for the lay person interested in inspecting a company’s records from the comfort of one’s own residence or office. No longer would it be necessary to visit the office of the Registrar of Companies (ROC) for inspecting a company’s records.
Now the Bill intends to take this process further. To meet this objective, the Bill authorises the Central government to make such rules as it may deem necessary for electronic filing of various documents, including those mentioned below. Each document will have to be authenticated in such manner as may be prescribed by the government. In other words, all such documents filed electronically will have to be signed electronically and it must also be ensured that due compliance is done.
The documents include: Balance sheet, prospectus, return, declaration, memorandum, articles, particulars of charges, or any other particulars or documents as may be required to be filed or delivered under the proposed Bill. It also includes notices, any communication or intimation, as may be required to be served or delivered under the proposed Bill.
For decades, the ROC had been keeping all the records in manual form thus making the whole task cumbersome and space consuming. The proposed law will change all this. All such records maintained by the ROC will have to be authenticated in such manner as may be prescribed by the rules.
Similarly, the ROC will give inspection of the memorandum, articles, register, index, balance sheet, return or any other particulars or document maintained in the electronic form for which necessary rules will be prescribed. Even the fees and other charges payable to the ROC will be done electronically. Change of registered office, alteration of memorandum or articles, prospectus, issue certificate of incorporation, etc, as also the performance of duties or discharge of functions or exercise of powers by the ROC under the new law or the rules will be in electronic form as well.
To implement the requirements under the new law, the Central government will notify a scheme to carry out the provisions through the electronic form.
Inspection of Records: The new law will have a provision to enable any person to inspect by electronic means any documents kept by the ROC in accordance with the rules. Such a person will have to pay the prescribed fees.
Voting Rights: A member will be permitted to exercise his vote, even postal ballots, by electronic means.
Service of Documents: All the documents to be served on a company can be served by electronic mode. However, all the existing modes of service will continue to remain in operation and the electronic mode will be an additional option. At the same time, even the company will be able to call a general meeting by giving notice through electronic mode.
Hopefully, with the advent of the new company law, presuming the Bill becomes an Act, there will be a perceptible change in the manner in which companies and ROC function that should lead to a more efficient and user-friendly system.
SD Israni is a corporate lawyer and Fellow of ICSI. Email: sdisrani@gmail.com
Till date, there are lakhs of manual records of companies kept under the Companies Act, 1956. This mode continues to this day and has failed to keep pace with the modern times. Hopefully, very soon this scenario will change when the Companies Bill, 2012 (the Bill)
will become the new law.
At the same time, it needs to be mentioned that the ministry of corporate affairs (MCA) was amongst the first ministries to initiate the move for digitisation of manual records. Even the returns and forms filed periodically are stored in electronic format. After the initial teething troubles, the MCA21, as the system is called, is now well settled and has become a source of great convenience not only to the companies that have to do the filings periodically, but also for the lay person interested in inspecting a company’s records from the comfort of one’s own residence or office. No longer would it be necessary to visit the office of the Registrar of Companies (ROC) for inspecting a company’s records.
Now the Bill intends to take this process further. To meet this objective, the Bill authorises the Central government to make such rules as it may deem necessary for electronic filing of various documents, including those mentioned below. Each document will have to be authenticated in such manner as may be prescribed by the government. In other words, all such documents filed electronically will have to be signed electronically and it must also be ensured that due compliance is done.
The documents include: Balance sheet, prospectus, return, declaration, memorandum, articles, particulars of charges, or any other particulars or documents as may be required to be filed or delivered under the proposed Bill. It also includes notices, any communication or intimation, as may be required to be served or delivered under the proposed Bill.
For decades, the ROC had been keeping all the records in manual form thus making the whole task cumbersome and space consuming. The proposed law will change all this. All such records maintained by the ROC will have to be authenticated in such manner as may be prescribed by the rules.
Similarly, the ROC will give inspection of the memorandum, articles, register, index, balance sheet, return or any other particulars or document maintained in the electronic form for which necessary rules will be prescribed. Even the fees and other charges payable to the ROC will be done electronically. Change of registered office, alteration of memorandum or articles, prospectus, issue certificate of incorporation, etc, as also the performance of duties or discharge of functions or exercise of powers by the ROC under the new law or the rules will be in electronic form as well.
To implement the requirements under the new law, the Central government will notify a scheme to carry out the provisions through the electronic form.
Inspection of Records: The new law will have a provision to enable any person to inspect by electronic means any documents kept by the ROC in accordance with the rules. Such a person will have to pay the prescribed fees.
Voting Rights: A member will be permitted to exercise his vote, even postal ballots, by electronic means.
Service of Documents: All the documents to be served on a company can be served by electronic mode. However, all the existing modes of service will continue to remain in operation and the electronic mode will be an additional option. At the same time, even the company will be able to call a general meeting by giving notice through electronic mode.
Hopefully, with the advent of the new company law, presuming the Bill becomes an Act, there will be a perceptible change in the manner in which companies and ROC function that should lead to a more efficient and user-friendly system.
SD Israni is a corporate lawyer and Fellow of ICSI. Email: sdisrani@gmail.com
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