The search report is related to a report based on some information and data of a particular search. It is used as a tool to examine the Company’s Records in the hands of stakeholders. Stakeholders are interested in the business activities of a company for personal advantage such as investment, loan repayment, etc. All documents related to a company filed by a company to the Registrar of Companies(ROC) can be inspected on the payment of prescribed fees. However, old documents like profit and loss accounts of private limited companies may be destroyed by ROC hence not available for inspection. A search report is prepared by professionals like Chartered Accountant(CA), Company Secretary(CS), Cost Accountant(CWA), Advocates after thorough inspection from the database of the Registrar of Companies(RoC).
What is the process to inspect documents filed with RoC?
A person is required to pay fees of Rs 100 by generating a challan from the Ministry of Corporate Affairs(MCA) website in view of public document options. After completing the payment process the documents of the company can be accessed by clicking on the “My Documents” option of the Ministry of Corporate Affairs (MCA) website and it can be viewed and downloaded for a total duration not exceeding 3, three hours and within 7, seven days. A search report can be prepared on the basis of the information available on the website.
In case documents filed by a company are not available on the Ministry of Corporate Affairs(MCA) website then approach the Registrar of Companies(ROC) with fees paid challan who shall allow you a physical inspection of documents filed by the company. The payment challan for public inspection should be in the name of the person who shall visit the Registrar of Companies(ROC) office or shall have an authority letter to inspect with him if payment challan is generated in the name of a company or any other entity. Pencils can be used to take notes as a pen is not allowed.
Generally, Banks and NBFC demand Search Reports from Companies to open Bank Accounts or grant Loans to Companies. The need for Search Reports arises to safeguard the banks from Non-performing assets(NPAs) and to ensure that the company is not defaulting one or not having defaulting directors.
What are the contents of the Search report?
A search report includes the following details of a company:
- Name of Company
- Registered Office Address of the Company
- Capital Structure of the Company
- Details of Directors of the company
- Details of Shareholders of the company
- List of Registered Charges.
- Other matters demanded by the Bank.
A search report includes the history of a company or the property held by the company such as who is the real owner of the property and how it has mortgaged with different banks over a period of time.
The main objective of a bank is to provide loans and earn interest on it. Search Report is used by Banks to know about the viability of their customer who has applied for CC Limits, Term Loans, or otherwise. Hence, the Banks ascertain the current position of the assets pledged by the companies.
Information to be provided by a company in Search Report about the existing Loans is as follows:
- Date of Loan taken by the company and the charge created in such respect
- Name and Address of the Charge Holders
- Type of Charge(Joint or consortium)
- Amount of loan
- Property Charged or pledged against such loan
- Terms and conditions of such loan
In case charge has been modified the details of such change are also required to be provided on which date the charge had been modified and what was the nature of such modification.