Article explains What is Search Report, Who Demands Search Report, Whether Search Report also includes information other than available over the MCA Portal, Why Banks emphasis more on Search Report, What Search Report Includes, How Search Report helps Banks to know about Property mortgaged with them and What Information is being given by Professional about a charge in Search Report (i) In Case of Creation of Charge (ii) In Case of Modification of Charge (iii) In Case of Satisfaction of Charge.
Search Report as the name suggests denotes to a report which is based on facts and figures of a particular thing. It is a measure for Stakeholders to know the details of the company. Since all the documents, filed with registrar of Companies, are public documents and available for general public, which lay over the Portal of Ministry of Corporate Affairs, any stakeholder can view and search the records over there by making a specified amount of fees.
Since, there are a no. of public departments, Government authorities, Financial Institutions which require the certified report by any Professional viz CA/ CS/ Advocate. Also The various stakeholders of a company are interested in the matters and activities of a company for their personal benefits as regards investment, repayment etc is concerned. Hence, the report being prepared by such Professional, after detailed inspection from the records of the Registrar of Companies on MCA Portal/ From Physical Records at office of Registrar of Companies (If needed) is called as Search Report (of Company)
Since, the Search Report means to search every record of the company and now a days everything is on MCA Portal, but even then a Professional Feels that some specific information has not been available over the portal which belong to the years when the documents used to be filed manually and physically in paper form, then such Professional may approach the Concerned Registrar of Companies’s Office in person with fees paid challan who shall allow you physical inspection of documents filed by the company from where we can note down the required details.
Banks, now a days, are more emphasizing on demanding Search Reports from Companies while sanctioning the loan/ Limits to the companies or may be at time of renewal of the limits. Most of time, the banks get the search reports certified from the Professionals who are on panel of Bank. This ensure the banks to be updated with
1. The company’s past history
2. Detail report on appointment and resignation of directors,
3. Defaulting status of directors and companies,
4. Capital structure of the company,
5. The loans taken by the company since incorporation,
6. Present records etc.
So instead of searching books and records of the company, the banks generally relies over such Search Report and make the loans/ Limits disbursed to the companies and get themselves safe from the non-certified records, which is being provided by the companies to the banks.
1. Name of Company
2. Registered Office Address of the Company
3. Capital Structure of the Company
4. List of Directors of the company
5. List of Shareholders of the company
6. List of Registered Charges
7. Any other matter as may be required by the Client/ Stakeholder
The intent of the Banks is to provide the loan to the customers for earning the interest. Hence the Banks always need to know the present status of the assets/ property mortgaged with them by the companies. And via Search Report the Banks come to the conclusion about the viability of their customer who approach the banks for CC Limits, Term Loans or otherwise.
A good search report provides the banks the history of the property held by the company i.e. who is the original owner of the property and how it has mortgaged with various banks over a period of time, complete information about the loans already taken by the company, property mortgaged etc..
The basic information given in Search Report about the existing Loans is as follows:
1. The date of Loan taken by the company and the charge created in such respect
2. The name and Address of the Charge Holders i.e. Bank
3. The type of Charge i.e whether joint charge or consortium charge
4. The Amount of loan
5. The property Charged or pledged against such loan including Latitude and Longitude of the property
6. The terms and conditions of such loan including Rate of Interest, Terms of Repayment etc.
In case of Modification of Charge along with above information, the details are also provided that on which date the charge had been modified and what was the nature of such modification.
If any time any charge is satisfied, i.e the whole amount is paid back by the company to the Bank, the Search Report generally depicts the complete information about such charge from the date of creation to modification and till the date of repayment and satisfaction of such charge from the records of the Registrar of Companies
Conclusion: Hence, we can say that the Search Report is basis tool in hands of the Banks to provide the complete information about the loans of the company, structure and status of the company. And also help the stakeholder’s to know about the company in which they are going to invest, control, manage, provide loan, enter into a contract etc.
Disclaimer: The author is based at Jalandhar and is practicing company Secretary and a Certified CSR Professional who deals in matters pertaining to Corporate Social Responsibility. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Authors recommend that professional advice is sought before taking any action on specific issues. The author can be however contacted for further clarification at 99145-58709 or via mail at firstname.lastname@example.org