{"id":6100,"date":"2020-04-04T15:11:49","date_gmt":"2020-04-04T09:41:49","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=6100"},"modified":"2022-11-16T15:43:07","modified_gmt":"2022-11-16T10:13:07","slug":"right-to-inspect-by-members-of-the-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/","title":{"rendered":"Right to Inspect by Members of the Company"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The companies act, 2013, has given many powers and rights to shareholders, directors, debenture holders, etc. &nbsp;The persons on the key managerial position, such as directors and other officials, have been given a statutory position and certain rights. Further certain rights have also been provided to various members of the company, which also includes the director&#8217;s liability to maintain statutory financial records and register of the company as per the provisions of section 170 of the companies at, 2013. In order to maintain transparency in the any company after due process of <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>Company Registration<\/strong><\/a>, members have also given right to inspect and take extract of such records and register. This is in order to follow and maintain corporate governance provisions.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#What_is_the_definition_of_term_%E2%80%98Member\" >What\nis the definition of term \u2018Member\u2019?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#What_are_the_provisions_under_which_company_records_are_maintained_and_kept\" >What\nare the provisions under which company records are maintained and kept?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#What_are_the_various_provisions_under_which_members_right_to_inspect_various_companies_register_are_defined\" >What\nare the various provisions under which member\u2019s right to inspect various companies\nregister are defined?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#Is_there_any_fee_prescribed_for_getting_inspection_copies\" >Is\nthere any fee prescribed for getting inspection copies?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#Prescribed_timeline_for_getting_copies_of_records\" >Prescribed timeline for getting copies\nof records:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#Penalty_amount_in_case_of_refusal_to_furnish_copies_of_records_by_company\" >Penalty amount in case of refusal to\nfurnish copies of records by company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#Remedy_In_case_of_refusal_by_company_to_furnish_record_copies\" >Remedy In case of refusal by company\nto furnish record copies:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/right-to-inspect-by-members-of-the-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_definition_of_term_%E2%80%98Member\"><\/span>What\nis the definition of term \u2018Member\u2019?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term \u2018Member\u2019 has been defined under\nsection 2 (55) of the companies act, 2013 as:<\/p>\n\n\n\n<p><em><strong>&nbsp;&#8220;member,&#8221; in relation to a company, means\u2014 <\/strong><\/em><\/p>\n\n\n\n<ul><li>The subscriber to the memorandum of the company who shall be considered to have agreed to become a member of the company, and on its registration, shall be entered as member in its register of members;<\/li><li>every person who agrees in writing to become a member of the company and that&#8217;s name is entered in the register of members of the company;<\/li><li>every entity holding shares of the company and whose name is entered as a beneficial owner in the records of a depository;\u201d<\/li><\/ul>\n\n\n\n<p>So any person who is agreed to be a member of\nthe company by entering his\/her name in writing into Register of Members of the\ncompany and holds certain shares of the company is deemed to be a member of the\ncompany.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_provisions_under_which_company_records_are_maintained_and_kept\"><\/span>What\nare the provisions under which company records are maintained and kept?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the provisions of the companies act,\n2013, directors of the company have been assigned duty to maintain financial\nrecords such as registers, index, debenture holders of the members at\nregistered office of the company as per section 163 of the companies act, 2013.\nAnd further, those records are open for inspection during normal business\nhours. Some nominal charges can be imposed for inspecting files of the company\nand getting extracts of the same.<\/p>\n\n\n\n<p>As per extracts of Section\n163(3) of the companies act, 2013:<\/p>\n\n\n\n<p><em><strong>\u201cAny such member, debenture holder or another person may- <\/strong><\/em><\/p>\n\n\n\n<ul><li>make extracts from any register, index, or copy referred to in sub-section (1) without fee or additional fee, as the case may be; or <\/li><li> require a copy of any such register, index, or copy or of any part thereof, on payment of<sup>&nbsp;1<\/sup> such sum as may be prescribed for each one hundred words or fractional part there of required to be copied.\u201d<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_various_provisions_under_which_members_right_to_inspect_various_companies_register_are_defined\"><\/span>What\nare the various provisions under which member\u2019s right to inspect various companies\nregister are defined?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In order to maintain corporate transparency\nand governance, certain rights of members in order to inspect records and\nregister maintained by directors of the company are defined under Section 171\nof the companies, 2013.<\/p>\n\n\n\n<p>As\nper section 171 of the companies act, 2013, certain right of members to inspect\nrecords has been mentioned. According to which:<\/p>\n\n\n\n<ul><li>Any register which is maintained by key managerial personnel of the company under Section 170 is open for examination and inspection by members. This inspection can be done during normal business hours of the company. Further members also have leverage to inspect and take extracts and copy of the said records free of any cost within a period of 30 days.<\/li><li>All financial records of the company erstwhile open for inspection to all public during <a href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/\"><strong><em>annual general meeting <\/em><\/strong><\/a>as per section 304 of companies act, 1956, which has now been replaced with section 171 of companies act 2013. Wherein rights in order to inspect records that were available to all public before are now available to only members and persons who attend AGM, i.e., Annual general meeting of the company.<\/li><li>Member cannot be denied to provide said copies applied for inspecting. In case of failure, a concerned person can file application to authority and ask for urgent delivery or supply of copies of records.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_there_any_fee_prescribed_for_getting_inspection_copies\"><\/span>Is\nthere any fee prescribed for getting inspection copies?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any\nmember of the company has the privilege to do inspection of records of the\ncompany free of cost and further to get copies or extract of the same free of\ncost. But any other person other than member of the person who attends annual\ngeneral meeting of the company can inspect and get copies free of cost at a\nnominal rate of Rs. 10 as per Rule 21A of the companies (central govt) general\nrules and prescribed forms.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prescribed_timeline_for_getting_copies_of_records\"><\/span>Prescribed timeline for getting copies\nof records:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any person who applied for extracts or copies of records from company that company is liable to furnish such record copies to the person within 10 working days from the date of request of furnishing copies as per <strong><em>section 163(4) of the companies act, 2013<sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/companies-act\/companies-act-2013.html\"><strong>[1]<\/strong><\/a><\/sup>.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalty_amount_in_case_of_refusal_to_furnish_copies_of_records_by_company\"><\/span>Penalty amount in case of refusal to\nfurnish copies of records by company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If company denies or fails\nto provide such copies as requested, in that scenario, such company or any\ndefaulting office of the company can be penalized up to amount of Rs. 500 per\nday for entire defaulting period. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Remedy_In_case_of_refusal_by_company_to_furnish_record_copies\"><\/span>Remedy In case of refusal by company\nto furnish record copies:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any person who is aggrieved by company or its\nofficial can approach NCLT, i.e., National Company Law Tribunal of jurisdiction\nwhere companies registered office is present. The concerned tribunal may pass\nsuch order to order defaulting company to allow aggrieved person to furnish\nsuch companies as required or as the case may be. Such a petition can be filed\nunder Section 163(6) of the companies act before NCLT or the tribunal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Transparency to records of the company is important in order to maintain corporate governance. And members play an important role in the same by accessing the information and keeping a record of such transactions and records of the company. Under new laws of companies act of 2013, many pragmatic provisions have been laid down comparatively erstwhile companies act of 1956, which have duly exercised positive role in corporate governance and transparency thereon.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/appointment-of-additional-director-in-a-company\/\">Appointment of Additional Director in a Company as per Companies Act, 2013\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The companies act, 2013, has given many powers and rights to shareholders, directors, debenture holders, etc. &nbsp;The persons on the key managerial position, such as directors and other officials, have been given a statutory position and certain rights. Further certain rights have also been provided to various members of the company, which also includes the [&hellip;]<\/p>\n","protected":false},"author":21,"featured_media":6103,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120,340],"tags":[456],"acf":{"service_id":"321"},"authorName":"Navdeep Kaur","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG_20190122_114933.jpg","authorDescription":"Navdeep is working as legal counsel in Enterslice group companies having more than 4 years of experience. She has expertise in legal, corporate and regulatory matters.","postViews":24431,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6100"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=6100"}],"version-history":[{"count":16,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6100\/revisions"}],"predecessor-version":[{"id":50773,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6100\/revisions\/50773"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/6103"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=6100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=6100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=6100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}