Government Companies & Registration Offices & Fees
Section 394. Annual reports on Government companies.
394(1).
When the Central Government is a member of a Government company, it has a duty to prepare and present an annual report on the company’s working and affairs.
(a)
This annual report must be prepared within three months of the company’s Annual General Meeting (AGM).
During this AGM, the CAG’s comments and the audit report (under Section 143(6) proviso) are placed.
(b).
After the report is prepared, the Central Government must lay it before both Houses of Parliament as soon as possible.
The report must be accompanied by:
A copy of the audit report.
The CAG’s comments, including any supplement or additional remarks.
394(2).
If a State Government, in addition to the Central Government, is also a member of a Government company, it has reporting responsibilities.
The State Government must ensure that a copy of the annual report (prepared under sub-section (1)) is laid before the State Legislature.
This report has to be laid down either before one House or both Houses, depending on the State’s legislative structure.
Along with the annual report, the State Government must also present:
A copy of the audit report.
The comments or supplementary remarks made by the Comptroller and Auditor-General of India (CAG).
Section 395. Annual reports where one or more State Governments are members of companies.
395(1).
When the Central Government is not a member of a Government company, the responsibility shifts to the State Government(s) that are members.
Every State Government that is a member of such a company and if only one State Government is a member, then that single State Government must ensure that an annual report on the working and affairs of the company is:
(a) Prepared within the time specified in Section 394(1).
(b) Laid before the House or both Houses of the State Legislature as soon as possible after preparation, along with:
A copy of the audit report.
The comments or supplementary remarks on the audit report referred to in Section 394(1).
395(2).
The rules under this section and Section 394 also apply to a Government company that is in liquidation.
They apply in the same manner as they would to any other Government company that is not in liquidation.
Section 396. Registration offices.
396(1).
To carry out the powers and functions given to the Central Government under the Companies Act and its rules including matters related to registration of companies:
The Central Government must, through a notification, set up as many offices and in such locations as it considers appropriate.
The notification must also specify the jurisdiction of each office.
396(2).
The Central Government may appoint Registrars, Additional Registrars, Joint Registrars, Deputy Registrars, and Assistant Registrars as needed.
These appointments are made to ensure proper registration of companies and to handle various functions and responsibilities under the Companies Act.
The powers and duties of these officers will be those that are prescribed.
396(3).
For the officers appointed under 396(2) (such as Registrars and their deputies/assistants), their terms and conditions of service are not arbitrary.
This includes their salaries and other service-related provisions.
These terms must be prescribed, meaning they are set out in the rules made under the Act.
396(4).
The Central Government has the authority to order that an official seal (or multiple seals) be created.
These seals are used to authenticate documents.
Section 397. Admissibility of certain documents as evidence.
Notwithstanding anything contained in any other law for the time being in force.
Any document reproduced from or derived from records filed by a company with the Registrar whether originally submitted on paper or electronically is covered by this provision.
If such a document is stored electronically by the Registrar & is authenticated by the Registrar or another officer authorised by the Central Government:
Then it is treated as a valid document for all purposes of the Companies Act and its rules.
It is admissible in legal proceedings under the Act without producing the original document.
It is accepted as evidence & the contents of the original and any fact stated in the original for which direct evidence is normally allowed.
Section 398. Provisions relating to filing of applications, documents, inspection, etc., in electronic form.
398(1).
This sub-section begins with a non-obstante clause, meaning it applies even if anything in the Companies Act says otherwise.
It also operates without affecting Section 6 of the Information Technology Act, 2000 (which recognises the validity of electronic records and filings).
The Central Government is given the power to make rules.
These rules may require certain actions to be followed from a date specified in those rules.
(a).
The Central Government may make rules requiring that certain documents under the Companies Act must be filed only in electronic form.
These documents include applications, balance sheets, prospectuses, returns, declarations, MOA , AOA , particulars of charges, and any other document or particulars that must be filed or delivered under the Act or its rules.
All such documents must be filed electronically from the date specified in the rules.
They must also be authenticated in the manner prescribed.
(b).
The Central Government may require that certain documents, notices, communications, or intimations that must be served or delivered under the Companies Act be served or delivered in electronic form.
These electronic documents must be authenticated in the manner prescribed by the rules (for example, through digital signatures or other approved methods).
(c).
These documents include applications, balance sheets, prospectuses, returns, declarations, MOA , AOA , particulars of charges, and any other document or particulars will be maintained by the Registrar in the electronic form and registered or authenticated, as the case may be, in such manner as may be prescribed.
(d).
Certain company documents such as the memorandum, articles, registers, indexes, balance sheets, returns, or any other records may be maintained in electronic form.
If these documents are ordinarily available for inspection under the Companies Act or its rules,
Then the rules may allow such inspection to be carried out electronically by any person.
The inspection must be done in the electronic form and in the manner prescribed.
(e).
Any fees, charges, or other amounts that must be paid under the Companies Act or its rules
may be required to be paid through electronic means (such as online payment systems).
The payment must be made in the manner prescribed by the rules.
(f).
The Registrar must carry out various statutory functions in electronic form, as prescribed in the rules.
These functions include:
Registering a change of registered office of a company.
Registering any alteration of the memorandum or articles
Issuing a certificate of incorporation.
Registering documents that are required to be filed.
Issuing certificates required under the Act.
Recording notices submitted under the Act.
Receiving communications that must be filed with the Registrar.
The Registrar must also perform any duty, discharge any function, or exercise any power under the Act electronically, where the Act or rules require such action.
Explanation:
The rules made under this section cannot deal with:
Imposing fines or any other monetary penalties.
Demanding or paying fees.
Handling violations or breaches of the Act.
Prescribing punishments for such violations.
398(2).
The Central Government has the power to create a scheme for implementing the requirements of 398(1).
This scheme must be introduced through a notification.
The scheme will specify how the provisions of 398(1) are to be carried out in electronic form.
Section 399. Inspection, production and evidence of documents kept by Registrar.
399(1).
Unless another section of the Companies Act creates an exception or restriction, the following rules will apply:
(a).
Any person is allowed to inspect documents electronically that are kept by the Registrar.
These documents must be ones that the Registrar has filed, registered, or recorded under the Companies Act.
The inspection must be done according to the rules made under the Act.
A person may inspect these documents upon payment of the prescribed inspection fee.
(b).
Any person may request:
A certificate of incorporation of any company.
A certified copy or certified extract of any other document (or part of a document) kept by the Registrar.
To obtain this, the person must pay the prescribed fees in advance.
The right to request such certified documents is subject to certain conditions:
(i).
For documents that are submitted to the Registrar along with a prospectus under Section 26:
These documents may be accessed freely only for 14 days starting from the date the prospectus is published.
After this 14-day period, such documents may be inspected or certified only with the permission of the Central Government.
(ii).
For documents delivered to the Registrar under Section 388(1)(b) (which also relates to matters involving a prospectus):
These documents may be accessed only during the 14 days starting from the date of the prospectus.
After the 14-day period expires, these documents can be inspected or certified only with the permission of the Central Government.
392(2).
A court or the Tribunal cannot issue an order requiring the Registrar to produce a document unless it first grants permission for such an order.
If the court or Tribunal does give this permission and issues the process:
The order must clearly state on its face that it has been issued with the leave (permission) of that court or Tribunal.
So , The Registrar cannot be compelled to produce documents without the explicit permission of the court/Tribunal, and any such order must show that permission was granted.
392(3).
If the Registrar provides a certified true copy or certified extract of any document kept or registered in the Registrar’s office,
There is no need to prove that the Registrar holds that official position (his certification is accepted automatically).
The certified copy or extract is admissible in all legal proceedings.
It has the same legal validity as the original document.
Section 400. Electronic form to be exclusive, alternative or in addition to physical form.
When making rules under Sections 398 and 399, the Central Government may specify how electronic filing or electronic processes are to be used.
The rules may state that the electronic form is the only (exclusive) method to be used for those purposes.
Or, instead of exclusivity, the rules may allow electronic form as an alternative to physical form, or in addition to the physical form.
Section 401. Provision of value added services through electronic form.
The Central Government is allowed to offer value-added services through electronic systems.
These services are provided in electronic form.
The Government may also charge a fee for these services, as long as the fee is prescribed in the rules.
Section 402. Application of provisions of Information Technology Act, 2000.
The Information Technology Act, 2000 contains rules about electronic records with respect to how they are created, stored, authenticated, and filed.
These IT Act provisions will also apply to electronic records used under Section 398 of the Companies Act, as long as there is no conflict between the two laws.
This includes rules about the manner and format in which electronic records must be filed.
Section 403. Fee for filing, etc.
403(1).
Any document that must be submitted, filed, registered, or recorded under the Companies Act must be completed within the time limit specified in the relevant section of the Act.
The same applies to any fact or information that is required or permitted to be registered under the Act.
These filings or submissions must be made upon payment of the prescribed fee.
With respect to late filing of documents under Section 92 (Annual Return) and Section 137 (Financial Statements):
If a company fails to submit, file, register, or record any document, fact, or information required under these sections within the prescribed time, the company may still file it after the deadline.
This late filing is allowed without affecting any other legal consequences or liabilities that may arise under the Act.
However, to file after the due date, the company must pay an additional fee, as prescribed.
The additional fee must be at least ₹100 per day of delay.
Different additional fee amounts may be prescribed for different classes of companies.
With respect to other filings under Companies Act , 2013
If any required document, fact, or information is not filed within the time specified in the relevant section,
The company may still file it after the deadline.
This late filing is allowed without affecting any other legal consequences or liabilities the company may face under the Act.
To file after the due date, the company must pay an additional fee, as prescribed in the rules.
The rules may specify different additional fees for different classes of companies.
With respect to repeated defaults while filing documents:
If a company defaults two or more times in submitting, filing, registering, or recording any prescribed document, fact, or information,
The company may still complete the filing after the deadline, just like under the previous provisos.
This late filing is allowed without affecting other legal consequences or liabilities under the Act.
However, because the company has defaulted multiple times, it must pay a higher additional fee, as prescribed in the rules.
403(2).
If a company fails or defaults in submitting, filing, registering, or recording any required document, fact, or information within the time limit specified in the relevant section of the Act,
Then both the company and the officers in default will face consequences.
This liability is in addition to the requirement to pay the normal filing fee and any additional fee for late filing.
The company and its defaulting officers will also be subject to the penalty or punishment prescribed under the Companies Act for that specific failure or default.
404. Fees, etc., to be credited into public account.
Any fees, charges, or other amounts collected by the Registrar, Additional/Joint/Deputy/Assistant Registrars, or any other Central Government officer,
under the Companies Act must be deposited into the public account of India.This deposit must be made in the Reserve Bank of India (RBI).
Section 405. Power of Central Government to direct companies to furnish information or statistics.
405(1).
The Central Government has the authority to issue an order requiring companies to provide information.
This order may apply to:
All companies.
A specific class of companies.
A particular company.
The information or statistics required may relate to the company’s constitution or its working.
The order will also specify the time limit within which the company must furnish that information.
405(2).
Every order issued under 405(1) must be published in the Official Gazette.
The order may be addressed to:
Companies in general, or a specific class of companies, in any manner the Central Government considers appropriate.
The date of publication in the Official Gazette is treated as the official date on which the requirement to furnish information or statistics is imposed.
405(3).
After a company furnishes information or statistics as required under 405(1), the Central Government may want to verify its correctness and completeness.
To do this, the Central Government may issue an order requiring the company to:
Produce relevant records or documents it possesses.
Allow an officer (appointed by the Government) to inspect those records.
Furnish additional information that the Government considers necessary.
405(4).
If a company fails to comply with an order issued under 405(1) or under 405(3) or If the company provides information that is incorrect or incomplete in any material way, then penalties apply.
Both the company and every officer in default are liable to a penalty of ₹20,000.
If the failure continues after the first day, there is an additional penalty of ₹1,000 per day, up to a maximum of ₹3,00,000.
405(5).
If a foreign company is carrying on business in India, then this section applies to it as well.
All references to a “company” in this section shall be interpreted to include the foreign company.
However, this inclusion is limited only to the business that the foreign company conducts in India.
Section 406. Provision relating to Nidhi’s and its application, etc.
406(1).
In this section, the term “Nidhi” or “Mutual Benefit Society” has a specific meaning.
It refers to a company that the Central Government formally declares to be a Nidhi or Mutual Benefit Society.
This declaration must be made through a notification in the Official Gazette.
406(2).
The Central Government may, through a notification in the Official Gazette, decide how certain provisions of the Companies Act will apply to a Nidhi or Mutual Benefit Society.
It may direct that the specified provisions:
(a) Shall not apply to any Nidhi or Mutual Benefit Society.
(b) Shall apply to any Nidhi or Mutual Benefit Society, but with exceptions, modifications, or adaptations as specified in the notification.
406(3).
Before issuing a notification under 406(2), the Central Government must place a draft copy of the notification before each House of Parliament.
The draft must remain before Parliament for a total of 30 days while Parliament is in session. These 30 days may be spread over one or more sessions.
If both Houses of Parliament:
Disapprove the proposed notification, then it cannot be issued, or
They can agree on modifications, then the notification can be issued only in the modified form approved by both Houses.
406(4).
When calculating the 30-day period mentioned in 406 (3), certain days are not counted.
Specifically, any period during which either House of Parliament is:
Prorogued (formally ended).
Adjourned for more than four consecutive days then , these days must be excluded from the 30-day calculation.
406(5).
After a notification under this section is officially issued, copies of it must be placed before each House of Parliament.
This must be done as soon as possible after issuance.
