Ozg Sarfaesi / DRT Lawyer
Ahmedabad | Pune |
Kolkata | Bangalore | Delhi | Mumbai
VoIP Text / Phone
# 09811415837-61-72-84-92-94
Website: http://sarfaesi.ozg.in
Email: debt@liaisoning.com
We have been witnessing
tremendous improvements in technology and as everybody knows e-governance has
brought far reaching changes and governance now really appears to be citizen
centric.
Corporate sector is also
benefited so much with technological advancements and with the projects like
e-governance. Earlier, corporate filing or filing the documents with the
Registrar of Companies (ROC) was really a tedious affair. With the introduction
of MCA scheme or online filing facility, regulating the company affairs has
become much easier and it is certainly a boon for corporate sector.
Incorporating a Company is not a difficult affair and filing the necessary
documents with the ROC and getting permissions from Central Government have
become so easy. With compliance requirements becoming so easy, the
participation in corporate sector has become more and more. We can access many
company documents on-line and without much risk. A shareholder need not worry
at the developments in the Company as he will be updated with all the major
events in the Company. It’s true that there exist certain limitations. For
example, it is very difficult to find-out the commercial viability of a charge
created by the Company over its assets and we can only see the e-form on-line
from the official web-site of Registrar of Company. There bound to be
limitations on many things. Share transfers have become so easy now though there
always tend to be some difficulties when it comes to transfer of shares of a
private limited company or when the shares are not dematerialized. We yet
achieve complete e-governance and the government is expanding the network
day-by-day. Soon, the office of official liquidator will also be brought under
MCA on-line network.
While there are many advantages
with e-filing facility, I want to focus on disadvantages or the complications
to be handled in the course.
Finding the procedure for filing
documents or returns with the Registrar of Companies is not a difficult task at
all now-a-days and even the MCA official website provides the instruction kit
and even laymen can understand the e-filing process with the ROC on his own if
he goes through the instructions kit.
But, every company and especially
private companies, closely held companies or the unlisted public companies
should be very careful at the internal filing mechanism. As otherwise, what
happens is that every director will be filing forms as per his whims and
fancies and battle among the groups in the Company starts with filing
fictitious forms leading to un-ending litigation. It blocs the progress of the
company even at times. It happens and it is happening.
The business deals in private
limited companies or the closely held companies will be very very interesting
and at times, will be very very complicated. The motive in most cases will be
raising finance in order to expand the business. A substantial investor may be
inducted into the Company as a director and with certain powers, creating an
impression that he commands some authority in the Company. Relations among the
managerial personnel will be very very complicated.
But, the promoters or the
majority in the Company should be very very careful at the internal filing
mechanism or the mechanism pertaining filing documents with the Registrar of
Companies. Otherwise, what happens is that, a director who is having grievance
with other group, may file some fictitious forms or may file forms continually
and it becomes a big problem for the majority in the Company and even the
Company will get collapsed with these things.
What I feel is that it is not
possible to withdraw a duly filed e-form and only thing for removal of an
illegally filed form is by way of a court order and we know the time
consumption before the courts or Company Law Board and it is inevitable in most
of the cases. It is true that corrections can be done in e-forms and the scope
of changes to be made on-line is very less.
If a director who represents a
minority in a Company wants to harm the Company or the majority, then, he may
misuse his authority at times and may file charge form with ROC as if the
entire company’s properties are mortgaged to somebody. Some may contend that
all illegal actions can be challenged before the appropriate forum. But, What
about the time factor? It is not possible in many cases to get an order from
the Court or the Company Law Board undoing an illegal action.
If a fictitious e-form is to be
challenged before the Company Law Board or the Company Court, then, there is
lot of procedure and it can not be overlooked. There must be an enquiry by the
Company Law Board or the Company Court for coming to a conclusion on a
particular issue or dispute.
When it comes to corporate
filing, normally the Company Secretaries will be advising the Company though at
times, Chartered Accountants and Company Lawyers will also be advising the
Company. All professions who are involved in secretarial practice or who advise
the management in a Company, should lay due emphasize on the filing mechanism
and the Company or the majority should accordingly be advised.
If once this fictitious filing of
forms is allowed, it leads to many complications ignoring the ground realities.
Ozg Sarfaesi / DRT Lawyer
Ahmedabad | Pune |
Kolkata | Bangalore | Delhi | Mumbai
VoIP Text / Phone
# 09811415837-61-72-84-92-94
Website: http://sarfaesi.ozg.in
Email: debt@liaisoning.com
