Section 206 Of Companies Act, 2013
Updated: Oct 7
What is Section 206?
As per the provisions of Section 206 of the Companies Act, 2013, the Registrar may require any company to furnish information or explanation or produce any document, if after scrutinizing any document or receiving any information, he feels that such documents are necessary. The Registrar may also inform the company of facts, seek its reply and order an inquiry if he has reason to believe that the business of the company is being carried out for a fraudulent purpose, or not in compliance with the Act, after giving the company a reasonable opportunity of being heard.
On scrutiny of any documents filed by the Company to ROC its the obligation of the company to provide information, explanations, and documents as the Registrar may direct. The information, explanation, or documents must be provided within a reasonable time as specified in the notice. The responsibility for compliance with this obligation is on the company and its officers who shall do so to the best of their knowledge and power. However, the obligation to provide information or explanation relating to any past period shall be on an officer who had been in the employment of the company during such period and if so-called upon by the Registrar using a notice.
Section 206 of the Companies Act 2013
[POWER TO CALL FOR INFORMATION, INSPECT BOOKS AND CONDUCT INQUIRIES]
1. Power of the Registrar to call for information, explanation, or documents: Where on scrutiny of any document filed by a company or on any information received by him, the Registrar thinks that any further information or explanation or documents relating to the company are necessary, he may, by written notice require the company to furnish the same within a specified time.
2. Duty of the company and its officers: On the receipt of a notice under section 206(1) from the registrar, it shall be the duty of the company and its officers, whether past or present, to furnish such information or explanation to the best of their knowledge and power within the time specified in the notice.
3. Additional written notice by the Registrar: In case no information is provided by the company or if inadequate information is submitted to the registrar, then the Registrar, for reasons recorded in writing, may by another written notice call on the company to produce for his inspection such further information.
4. Inquiry by the Registrar: Based on information available with him or representations made to him or grievance of the shareholders not being addressed, the Registrar may call on the corporate to furnish in writing any information or explanation on matters laid out in the order within such time as he may specify therein and undertake such inquiry as he deems fit after providing the company with a reasonable opportunity of being heard.
5. Inspection by Central Government: The Central Government may, if it deems fit, direct inspection of books and papers of a company by an inspector appointed by it for this purpose.
6. Failure to furnish information: The Company and every officer of the company, who is in default shall be punishable with a fine which may extend to 1 lakh rupees and in the case of a continuing failure, with an additional fine which may extend to 500 rupees for every day.