Amended and updated notes on section 216 of Companies Act 2013. Detail discussion on provisions and rules related to investigation of ownership of company.
Chapter XIV (Sections 206–229) of the Companies Act, 2013 (CA 2013) deals with the provisions related to Inspection, Inquiry and Investigation. Section 216 of CA 2013 provides for investigation of ownership of company.
Recently, we have discussed in detail section 215 (Firm, body corporate or association not to be appointed as inspector) of CA 2013. Today, we learn the provisions of section 216 of Companies Act 2013.
The provisions of section 216 are effective from 1-April-2014. You may refer Notification No. S.O. 902(E) issued dated 27-03-2014. In this article, you will learn detail of the provisions of section 216 of the Companies Act 2013 read with the Companies (Inspection, Investigation and Inquiry) Rules, 2014.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XIV |
| Chapter Name | Inspection, Inquiry and Investigation |
| Section No. | 216 |
| Section Name | Investigation of ownership of company |
| Monthly Updated Edition | Company Law PDF |
Section 216 of Companies Act 2013: Investigation of ownership of company
Section 216 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014 except sub-section (2) which shall come into force on 1st June, 2016 vide Notification No. S.O. 1934(E) issued dated 01.06.2016.
(1) Where it appears to the Central Government that there is a reason so to do, it may appoint one or more inspectors to investigate and report on matters relating to the company, and its membership for the purpose of determining the true persons—
- (a) who are or have been financially interested in the success or failure, whether real or apparent, of the company; or
- (b) who are or have been able to control or to materially influence the policy of the company; or
- (c) who have or had beneficial interest in shares of a company or who are or have been beneficial owners or significant beneficial owner of a company.
(2) Without prejudice to its powers under sub-section (1), the Central Government shall appoint one or more inspectors under that sub-section, if the Tribunal, in the course of any proceeding before it, directs by an order that the affairs of the company ought to be investigated as regards the membership of the company and other matters relating to the company, for the purposes specified in sub-section (1).
(3) While appointing an inspector under sub-section (1), the Central Government may define the scope of the investigation, whether as respects the matters or the period to which it is to extend or otherwise, and in particular, may limit the investigation to matters connected with particular shares or debentures.
(4) Subject to the terms of appointment of an inspector, his powers shall extend to the investigation of any circumstances suggesting the existence of any arrangement or understanding which, though not legally binding, is or was observed or is likely to be observed in practice and which is relevant for the purposes of his investigation.