A Project Work on

ROC as a Prime Regulator: Indian Scenario

PROJECT SUBMITTED TO: PROJECT SUBMITTED BY :

Dr. Y. PAPA RAO NEELAM THAKUR (FACULTY

MEMBER OF CORPORATE REGULATION) SEMESTER- IX

ROLL NO.: 88
SEC.-C
(B.A., L.L.B (Hons.)

(DATE OF SUBMISSION- 25/10/2018)

HIDAYATULLAH NATIONAL LAW UNIVERSITY

UPARWARA, NEW RAIPUR (C.G.)

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 CERTIFICATE OF DECLARATION

The researcher hereby declares that the project work entitled “ ROC as a Primary Regulator:
Indian scenario “submitted to Hidayatullah National Law University, Raipur, is a record of an
original work done by the researcher under the guidance of Dr. Y. Papa Rao Sir, faculty
member of Corporate Regulation (Hons.), Hidayatullah National Law University Raipur.
The research done by the researcher is his own original work and wherever excerpts from the
works of different authors have been taken, they have been duly acknowledged.

Declared By:

Neelam thakur
Roll No. 88
Section-C
Semester- IX
B.A., L.L.B (Hons.)

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 TABLE OF CONTENTS

Research Methodology………….......................................................................................4

Objectives of the study………..…….....................……....................................................4

Introduction…………………………………………………………………...…………5

Conclusion…………………………………………………………...…………………..18

Bibliography…....................................................................................................................19

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RESEARCH METHODOLOGY

This research is descriptive and analytical in nature. Secondary and electronic resources have
been largely used to gather information and data about the topic.

Books and other reference as guided by the faculty have been primarily helpful in giving this
project a firm structure. Websites, dictionaries, articles and cases have also been referred.

OBJECTIVES OF THE STUDY

This project seeks to give a brief idea about Registrar of Company as a primary regulator in
corporate governance. The duties and powers and the role which the registrar of a company
plays. Following are the objectives of the given project report:

 To discuss the various powers and functions of ROC under the Companies Act.

 To discuss the vital role of ROC to deal with the Incorporation of companies, change of
name of companies, change of financial year, conversion of companies from Private to Public
etc.

 To discuss about MCA as a prime regulatory body who governs the working of different
ROCs and also about MCA 21 project.

 To discuss the different roles of ROCs and how he is held to be the prime regulatory
body.

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 INTRODUCTION

Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering
the various States and Union Territories, are vested with the primary duty of registering
companies floated in the respective States and Union Territories and of ensuring that such
companies comply with statutory requirements under the Act. These offices function as
registries of records relating to the companies registered with them, which are available for
inspection by members of the public on payment of the prescribed fee. The Registrars of
Companies in different States primarily deal with the Incorporation of companies, change of
name of companies, change of financial year, conversion of companies from Private to Public
and vice versa, striking off of the names of companies, and default action against companies.

“Primary regulator” means

(a) The Registrar of Companies appointed under the Companies Act;

(b) The Registrar of Societies appointed under the Societies Act

(c) The Registrar of Co-operatives appointed under the Co-operative Societies Act;

“Registrar” means the person appointed as Registrar of Banks, Financial Institutions and
Financial Businesses under the provision of the Act;

According to section 2(75) of the Companies Act, 1956 – ‘Registrar’ means a Registrar, or an
Additional, a joint, a Deputy, or an Assistant Registrar, having the duty to registering
companies and discharging various functions under this Act. Section 396 of the Act
empowers the Central Government to establish registration offices for the purpose of
registration of companies and exercising other powers and functions under the Act.

R.O.Cs. are the field officers who deals directly with the companies registered or intended to
be registered within their territorial jurisdiction. The Companies Act has vested in them wide
powers and important responsibilities in connections with the administration of the Act.

The Central Government appoint Registrar, Additional, Joint, Deputy and Assistant
Registrars as may be appropriate and define their jurisdiction. There is a R.O.C. for each

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State of India. He is a full time officer appointed by the Central Government and is
responsible for the administration of the company law in that State. He may be assisted in his
work by the other registration officers, i.e. Additional, Joint, Deputy and Additional
Registrars. The Companies (Registration Office and Fees) Rule, 2014 prescribe the manner
and conditions for filing with the Registrar, authentication of documents, procedure to be
followed by the Registrar, filing fees and inspection of documents kept by the Registrar.

The Registrar of Companies (ROC) is an office under the Indian Ministry of Corporate
Affairs that deals with administration of the Companies Act 1956 and Companies Act, 2013.
There are currently 22 Registrars of Companies (ROC) operating from offices in all major
states of India. Some states, such as Maharashtra and Tamil Nadu, have two ROCs each.
Section 609 of the Companies Act, 1956 tasks the ROCs with the primary duty of registering
companies and LLPs floated in the respective states and the union territories under their
administration.

The ROCs also ensure that LLPs comply with the statutory requirements under the
Companies Act. The office of the ROC is maintains a registry of records related to companies
registered with them, and permits the general public to access this data on payment of a fee.
The Union Government maintains administrative control over ROCs through Regional
Directors. There are 7 Regional Directors, and they supervise the functioning of ROCs within
their respective regions.

The Registrar of Company takes care of company registration (also known as incorporation)
in India, completes reporting and regulation of companies and their directors and
shareholders, and also oversees government reporting of various matters including the annual
filling of various documents.

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Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering
the various States and Union Territories are vested with the primary duty of registering
companies and LLPs floated in the respective states and the Union Territories and ensuring
that such companies and LLPs comply with statutory requirements under the Act. These
offices function as registry of records, relating to the companies registered with them, which
are available for inspection by members of public on payment of the prescribed fee. The
Central Government exercises administrative control over these offices through the respective
Regional Directors1.

Right from the Registration of a Cooperative Society till the cancellation of its registration,
the Registrar acts as friend, philosopher and guide to the cooperatives and ensures that
Cooperative Societies function in accordance with the Cooperative Act. In fact the Registrar
is "Trimurti" of the Cooperative movement. The main functions of the Registrar are as under:

1. Registration of Cooperative Societies;

2. Registration of amendments in the Bye-laws of Cooperative Societies;

3. Amalgamation, Division and re-organization of Cooperative Societies;

4. Ensure timely Election of the Managing Committee in Cooperative Societies;

5. Conduct elections of Managing Committee in primary cooperative banks and federal

cooperative societies;

6. Ensure proper investment of funds by Cooperative Societies as per Act and Rules;

7. Conduct audit, order inspection, enquiry and also fixing surcharge on negligent
functionaries of cooperative societies;

8. Settle disputes of Cooperative Societies through the process of arbitration.

9. Function as an appellate Court;

10. Enforcement/execution of Orders, Awards and Decrees of various Courts;

11. Order winding up and cancellation of registration of defunct/non-functional societies.

1
http://www.mca.gov.in/MinistryV2/registrarofcompanies

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12. Operating Cooperative Education Fund for training, education, propaganda and
publicity programme for the development of Cooperative Movement in the NCT of Delhi.

13. To frame/amend Delhi Cooperative Societies Rules, 1973 from time to time.

14. Issue Instructions/directives for the promotion of business of different type of

Cooperatives;

15. To approve proposals for enrolment, resignation and cessation of membership in Housing
Cooperative; and

16. To frame, execute and monitor various beneficiary schemes approved by the Central
/State Govts, including financial assistance to various sectors of Cooperatives.

The Registrar finalizes the list of eligible allottees after deleting the invalid applications and
ensures that the corporate action for crediting of shares to the demat accounts of the
applicants is done and the dispatch of refund orders to those applicable are sent. The Lead
manager coordinates with the Registrar to ensure follow up so that that the flow of
applications from collecting bank branches, processing of the applications and other matters
till the basis of allotment is finalized, dispatch security certificates and refund orders
completed and securities listed2.

Registrars to an Issue and Share Transfer Agents Registrars to an issue (RTI) and share
transfer agents (STA) are registered with SEBI in terms of the SEBI (Registrar to the Issue
and Share Transfer Agent) Rules and Regulations, 19933. Under these regulations,
registration commenced in 1993-94 and is granted under two categories: category I - to act as
both registrar to the issue and share transfer agent and category II - to act as either registrar to
an issue or share transfer agent. With the setting up of the depository and the expansion of the
network of depositories, the traditional work of registrars is likely to undergo a change.

2
http://business.gov.in/starting_business/list_registrars.
3
http://www.mca.gov.in/MinistryV2/registrarofcompanies

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The basic function of the transfer agent is to maintain accurate records of shareholders and of
creditors holding registered debt securities. The registrar must maintain accurate records of
the number of shares authorized and outstanding, and the amount of debt actually owed and
represented by debt securities. The SEC's rules seek to ensure the accuracy of security holder
records and require that there be an accurate posting to keep the records current. The
minimum records that must be kept are the "master security holder file," representing the
stockholder ledger on which the transfer agent records the "certificate detail" for each
security and the "control book," kept by the registrar, which shows the total number of shares
authorized and outstanding on the principal dollar amount of debt authorized and issued.
Should an over issue of equity securities occur, the issue will be absolutely void and cannot
be validated. The remedy of a holder of an over issued security against the issuer is limited to
compelling the purchase of an identical security in the open market, or to demand the
payment of damages. The holder of an over issued security may also claim that the transfer
agent or registrar breached the warranty that the security is genuine and that there are
reasonable grounds to believe that the security was within the amount the issuer is authorized
to issue. The transfer agent is obligated to “buy in” such securities arises when a record
difference remains unreconciled for a period of thirty days from its discovery and is imposed
on the transfer agent that actually caused the over issue.

The Rules defines a Registrar to an Issue as under:-

"Registrar to an Issue" means the person appointed by a body corporate or any person or
group of persons to carry on the following

i. Collecting applications from investors in respect of an issue;

ii. Keeping a proper record of applications and monies received from investors or
paid to the seller of the securities. And
iii. Body corporate or person or group of persons in-
a. Determining the basis of allotment of securities in consultation with the stock
exchange;
b. Finalising of the list of persons entitled to allotment of securities;
c. Processing and despatching allotment letters, refund orders or certificates and
other related documents in respect of the issue.

The term "Share Transfer Agent" is defined as under:-

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"Share Transfer Agent" means-

i. Any person, who on behalf of any body corporate maintains the record of holders
of securities issued by such body corporate and deals with all matters connected
with the transfer and redemption of its securities.
ii. A department or division (by whatever name called) of a body corporate
performing the activities referred in sub-clause (i) if, at any time the total number
of the holders of securities issued exceed one lakh.

General Obligations and Responsibilities of Registrar to an Issue & Transfer Agent

(Regulation 13)4

1. Every registrar to an issue and share transfer agent holding a certificate shall at all times
abide by the Code of Conduct as specified in Schedule III.

2. No registrar to an issue shall act as such registrar for any issue of securities in case he or it
is an associate of the body corporate issuing the securities (Regulation 13A).

3. To maintain proper books of accounts and records, etc. (Regulation 14)

1.) Every registrar to an issue and share transfer agent being a body corporate shall keep and
maintain the following books of accounts and documents in respect of three preceding
financial years, namely:-

A. in relation to registrar to an issue and share transfer agent being a body corporate

1. A copy of balance sheet and profit and loss account as specified in sections 211 and 212 of
the Companies Act, 1956 (1 of 1956);

2. A copy of the auditor's report referred to in section 227 of the Companies Act, 1956 (1 of
1956);

3. A statement of capital adequacy requirements for each quarter.

4. In relation to registrar to an issue and share transfer agent not being a body corporate -

i. All sums of money received and expended by them and the matters in respect of which the
receipt and expenditure take place;

4
http://www.mca.gov.in/MinistryV2/registrarofcompanies

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ii. Their assets and liabilities; and

iii. A statement of capital adequacy requirements for each quarter.

2.) Every registrar to an issue shall also maintain the following records with respect to:-

 All the applications received from investors in respect of an issue;

 All applications of investors rejected and reasons therefore;
 Basis of allotment of securities to the investors as finalised in consultation with the
stock exchange;
 Terms and conditions of purchase of securities;
 Allotment of securities;
 List of names of allottees and non-allottees of the securities;
 Refund orders despatched to investors in respect of application monies received from
them in response to an issue;
 Such other records as may be specified by the Board for carrying on the activities as
registrars to an issue.

CODE OF CONDUCT (Schedule III)

1. A registrar to issue and share transfer agent shall maintain high standards of integrity and
fairness in all their dealings with their clients and other registrars to issue and share transfer
agents in the conduct of their business.

2. A registrar to issue and share transfer agent shall act with due skill, diligence and care in
the conduct of all their activities.

3. A registrar to issue and share transfer agent shall not indulge in unfair competition, which
is likely to be harmful to the interests of other registrars to issue and share transfer agents or
is likely to place such other registrars to issue and share transfer agents in a disadvantageous
position in relation to the registrar to issue and share transfer agent, while completing for or
executing any assignment.

4. A registrar to issue and share transfer agent shall not make any exaggerated statement,
whether oral or written , to the clients either about their qualifications or capability to render
certain services or their achievements in regard to services rendered to other clients.

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5. A registrar to issue and share transfer agent shall not divulge to other clients, press or any
other party any confidential information about their clients, which have come their
knowledge.

6. A registrar to issue and share transfer agent shall endeavour to ensure that-

 inquiries from investors are adequately dealt with.

 Adequate steps are taken for proper allotment of securities and refund of application
monies without delay as per the law.

7. A registrar to issue and share transfer agent shall not generally and particularly in respect
of any dealings in securities be party to -

 Creation of false market;

 Price rigging or manipulation;
 Passing of unpublished price sensitive information to brokers, members of the stock
exchanges and other intermediaries in the securities market or take any other action
which is not in the interest of the investors.
 No registrar to issue and share transfer agent or any of its directors, partners or
manager having the management of the whole or substantially the whole of affairs of
their business shall either or their respective accounts or through their associates or
family members, relatives or friends indulge in any insider trading.

8. (a) A registrar to issue and share transfer agent or any of his employees shall not render,
directly or indirectly, any investment advice about any security in the publicly accessible
media, whether real-time or non real-time unless a disclosure of his interest including long or
short position in the said security has been made, while rendering such advice.

8. (b) In case, an employee of the registrar to issue and share transfer agent is rendering such
advice, he shall also disclose the interest of his dependent family members and the employer
including their long or short position in the said security, while rendering such advice.

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Duties of Registrar

The R.O.C. has certain duties after documents are filed with him by companies for
registration, record, or filing. Under Rule 10 of the Companies (Registration Office and Fees)
Rule, 2014, after a document received in his office which is required under the Act to be
registered, recorded or filed by or with the R.O.C. The R.O.C. need to take a decision within
thirty days from the date of filing of the document.

If any such document is found to be defective or incomplete in any respect, the R.O.C. shall
direct the company to rectify the defect or complete the document within fifteen days. No
such document shall be registered, recorded or filed until the defect is rectified or the
document is completed by the company and requisite filing fee is paid. If the document has
been recorded invalid by the Registrar, it may be rectified by the person or company only by
fresh filing with payment of fee and additional fee.

All the documents filed or registered with the R.O.C. are available for inspection by any
person or payment of the prescribed fees. Any person may require a certificate of
incorporation or a copy or extract of any document or part thereof to be certified by the
R.O.C. on payment of fees.

Section 403 of the Act specifies that fees for filing various documents with the ROC shall be
payable as may be prescribed. Belated filing of the documents will invite additional fees. The
annexure to the Companies (Registration Office and Fees) Rules, 2014 in pursuant of Rule 12
prescribe the fees and additional fees to be paid to the Registrar. But payment of additional
fee does not bar incidence of any other liability leviable on the defaulting company e.g.
criminal liability. Payment of additional fee only brings to end the effects of continuing
defaults – Flora International Ltd. v. ROC5.

5
(2003) 48 SCL 757 (Kar.)

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Powers of Registrar (ROC)

Certain powers are vested in the R.O.Cs. under various sections of the Act. In certain cases,
the Central Government has delegated its powers to the R.O.Cs.

By notification of the Ministry of Corporate Affairs, the power and function of the Central
Government under the following sections have been delegated to the ROC-

(a) Sub-section (2) of Section 4

(b) Sub-section (1) of Section 8
(c) Clause (i) of sub-section (4) of section 8, except for alteration of memorandum in case
of conversion into another kind of company.
(d) Sub-section (5) of section 8 and
(e) Sub-section (2) of section 13.

Under section 96 of the Act, the R.O.C. is empowered to extend the time of holding the
Annual General Meeting of a company (other than first AGM), by a period not exceeding
three months.

Under section 206 and 207 of the Act, the R.O.C. is empowered to call the books of account
and other books and papers of every company and to call on the company, by written order,
to furnish in writing such information or explanation with regard to any document submitted
to him under this Act, within such time, as may be specified in the order , if the R.O.C on
perusing the document is of the opinion that any information or explanation is necessary in
respect of any matter to which such document purports to relate.

Under section 209 of the Act, the R.O.C. is empowered to apply to the Special Court for an
order for the seizure of the books and papers of a company, where the R.O.C has reasonable
grounds to believe that such books and papers relating to the company may be destroyed,
mutilated, altered, falsified or secreted.

Under section 248 of the Act, the R.O.C. has the power to strike a name of a company off the
register of the companies, after complying with the procedure laid down in that section.

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Disposal of Records in the Offices of Registrars

Under powers vested by the Destruction of Records Act, 1917, the Central Government
framed the Disposal of Records (In the Offices of Registrars) Rules,2003 which governed the
maintenance of records at the offices of the R.O.C. No record in the office of the R.O.C.
shall be destroyed without R.O.C’s previous order in writing. The R.O.C shall maintain a
Register where he shall enter brief particulars of the records destroyed and shall certify in his
own hand the date and mode of destruction ( Rule 5 and 6)6.

6
http://business.gov.in/starting_business/list_registrars.php

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Launch of MAC-21 programme

Ministry of Company Affairs (MCA) has launched a major E-Governance initiative (MCA-
21). It envisages e-filing of all documents relating to company matters on the MCA portal.

MCA has moved from the traditional paper-based operation to a near paperless environment.
Consequently, the conventional forms prescribed for various transactions have been adapted
for use through electronic medium. The processes and forms of MCA have been simplified
and standardized for electronic filing (e-filing) through e-Forms.

The Salient Futures of the MAC-21 include that the Corporations, professionals and the
public at large will no longer need to visit the Registrar of Companies offices and would be
able to interact with the Ministry using MCA-21 portal from their office or home or by going
to the facilitation centres, which have been set-up.

The statutory filing of forms and returns in the offices of ROCs is now on the basis of new E-
forms only, all manual filing of documents has been discontinued. Permanent documents of
existing companies like, Memorandum of Association, Articles of Association, current
charge documents etc. Are presently maintained in paper form across various Registrar of
Companies( ROC) offices. Almost all these documents have been converted into electronic
format. The scope of E-filing covers only the offices of ROCs, Regional Directors and
Headquarters at New Delhi and it does not include Official Liquidators, Company Law
Board/Tribunal and Courts.

The present scope of the MCA 21 includes services provided by the Secretariat at New Delhi,
the four Regional Directors (RDs) and the 20 offices of the Registrar of Companies (ROC)
located all over the country.

For the purpose of standardization and better understanding, the purposed e-Forms have been
grouped under the following broad categories:

(a) New Company Registration

(b) Compliance Related Filing- Whether annually or event based include Annual Return,
Balance Sheet and Profit & Loss Account, Return of allotment, Returns of deposits,
Return of appointment of managing directors, whole-time directors, Statutory report,
Cost and audit report etc.

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(c) Change Services- It covers matters in respects of any change in the capital structure,
change in the registered office or the person appointed as directors, secretariats and
authorized representatives.
(d) Charge Management- For registration of charge created or modified and satisfaction
of charge, to be filed with the ROC. It also includes filing of e-Forms for appointment
and cessation of receiver and filing of accounts by receivers.
(e) Application for ROCs approval – ROC has the power to give direction in relation to
the matters pertaining to the change of name of an existing company and the
conversion of a public company to private company. In addition, ROC approval is
required in case of extension of time period for holding AMG, holding AMG at place
other than registered address, declaring a company as defunct, extension of the period
of annual accounts, amalgamation of companies, Forms relating to winding up etc.
The MCA has also prescribed several new e-Forms for which there were no
prescribed forms available.
(f) Informational Services – It covers those forms which are to be filed with ROC for
informational purposes, in compliance with the provisions of Companies Act i.e.
declaration of solvency in case company decides to buy back its shares, forms for
filing of resolutions and agreements, form regarding place where books of account are
kept, form in case company decides to transfer its shares to another company etc.

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 CONCLUSION

From this project, I come to the conclusion and learned that the Registrars of Companies
(ROC) is appointed under Section 609 of the Companies Act and are vested with the primary
duty of registering companies floated in the respective States and Union Territories and of
ensuring that such companies comply with statutory requirements under the Act. The
Registrars of Company primarily deal with the Incorporation of companies, change of name
of companies, change of financial year, conversion of companies from Private to Public and
vice versa, striking off of the names of companies, and default action against companies.

R.O.Cs. are the field officers who deals directly with the companies registered or intended to
be registered within their territorial jurisdiction. The Companies Act has vested in them wide
powers and important responsibilities in connections with the administration of the Act. He is
a full time officer appointed by the Central Government and is responsible for the
administration of the company law in that State. The ROCs also ensure that LLPs comply
with the statutory requirements under the Companies Act. The office of the ROC is maintains
a registry of records related to companies registered with them, and permits the general
public to access this data on payment of a fee.

Under Rule 10 of the Companies (Registration Office and Fees) Rule, 2014, after a document
received in his office which is required under the Act to be registered, recorded or filed by or
with the R.O.C. The R.O.C. need to take a decision within thirty days from the date of filing
of the document.

If any such document is found to be defective or incomplete in any respect, the R.O.C. shall
direct the company to rectify the defect or complete the document within fifteen days. No
such document shall be registered, recorded or filed until the defect is rectified or the
document is completed by the company and requisite filing fee is paid. If the document has
been recorded invalid by the Registrar, it may be rectified by the person or company only by
fresh filing with payment of fee and additional fee.

All the documents filed or registered with the R.O.C. are available for inspection by any
person or payment of the prescribed fees. Any person may require a certificate of
incorporation or a copy or extract of any document or part thereof to be certified by the
R.O.C. on payment of fees.

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 Bibliography

1. Company Law and Practise by Dr. G.K. Kapoor , Taxmann’s Publication, 20th
Edition.
2. Company Law by Dr. H.K. Saharay, Universal Publication, 7th Edition.
3. Company Law by Avatar Singh, Eastern Book Company Publication, 16th Edition.

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