Distinguish between the following: 'Inspection' and 'Investigation' of companies in India.

CS Executive · Company Law · PYQS · December 2017
Distinguish between the following: 'Inspection' and 'Investigation' of companies in India.

Answer & Explanation:

The inspection is prescribed under Section 206(2) while Section 207 deals with conduct of the inspection. According to Section 206(2) read with sub-section (1), where the Registrar of Companies require information or explanation or any documents relating to the company and no information or explanation is furnished to the Registrar within the time specified under sub-section (1) or if the Registrar on an examination of the documents furnished is of the opinion that the information or explanation furnished is inadequate or if the Registrar is satisfied on a scrutiny of the documents furnished that an unsatisfactory state of affairs exists in the company and does not disclose a full and fair statement of the information required, he may, by another written notice, call on the company to produce for his inspection such further books of account, books, papers and explanations as he may require at such place and at such time as he may specify in the notice. Whereas, in case of 'investigation', where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company: (a) on receipt of a report of the Registrar or Inspector under Section 208, (b) on intimation of a special resolution passed by a company that the affairs of the company ought to be investigated; or (c) in public interest, may order an investigation into the affairs of the company. [Sec. 210(1)]. Further, where an order is passed by a court or the Tribunal in any proceedings before it that the affairs of a company ought to be investigated, the Central Government shall order an investigation into the affairs of the company [Section 210(2)]. The Central Government may appoint one or more persons as inspector to investigate into the affairs of the company and to report thereon in such manner as the Central Government may direct [Sec. 210(3)].

Topics: Inspection, Inquiry and Investigation

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