The Hindu Business Line : ICSI urges Registrar of Cos to streamline procedures

TROUBLED by the diverse practices prevalent at the Registrar of Companies (RoC) offices regarding interpretations of various provisions of company law, corporates and professionals are seeking standardisation of the procedures.

Some of the areas where diverse practices have been noticed include those pertaining to name availability, authorised capital, annual reports and change in name of an existing company.

"Though the Government has issued guidelines for following these norms, the confusion arises due to non-availability of the same with professionals and companies," the Institute of Company Secretaries of India (ICSI) official said.

With a view to streamlining and standardising various procedures and practices at different RoC offices, the institute has suggested certain measures to the Ministry of Company Affairs (MCA).

There are diverse practices adopted by the RoCs for allowing/not allowing incorporation of a company with lesser-authorised capital than the prescribed limit under the law. The Ministry had, in 1989, issued guidelines for minimum authorised capital for use of key words as part of the name.

"In our view, except in cases mentioned in the aforesaid notification, a promoter can incorporate company irrespective of what was stated on amount of authorised capital. The authorised capital, however, should not be less than the minimum prescribed paid-up capital under the Companies Act," ICSI official said.

It has also been noticed that different interpretations are followed by RoCs for availability of names for registration, when the first word of the proposed name is common and all other words are not common with the name of an existing company. The institute has suggested that uniform consolidated guidelines may be issued to have a standard norm.

Further, some RoC offices insist for filing of a copy of the resolution passed by members of a limited company to increase its share capital. "In our view, there is no such requirement as per provisions of the Companies Act," the official said. A limited company having a share capital can increase its share capital by such amount as it thinks expedient.

A notice for increase in capital is required to be filed by the company with the Registrar within 30 days after passing of the resolution for the purpose. He then records the increase and also makes any alterations, which may be necessary in the company's articles or memorandum or both.