Section 213 of the Companies Act, 2013
Section 213 of the Companies Act, 2013 deals with the investigation into a company’s affairs in other cases—i.e., when the Central Government may direct the National Company Law Tribunal (NCLT) to investigate a company, even if it is not based on routine or registrar recommendations.
📜 Section 213 – Investigation into Company’s Affairs in Other Cases
✅ Key Provisions:
The Tribunal (NCLT) may order an investigation into the affairs of a company:
Based on an application by:
100 or more members (for companies with share capital), or members holding at least 10% of voting power,
1/5th of the total number of members (for companies without share capital),
and they must provide supporting evidence for their allegations.
Or, on its own, if:
It is satisfied that there are circumstances suggesting:
The business of the company is being conducted with intent to defraud creditors, members, or any other person,
The company is being run for a fraudulent or unlawful purpose,
Persons involved in the formation or management of the company have been guilty of fraud, misfeasance, or misconduct,
The members have not been given all information related to affairs of the company which they should have.
🔎 Investigation Ordered by NCLT May Lead to:
Inspection of books and records,
Scrutiny of transactions,
Questioning of directors and officers,
Further legal action if fraud/misconduct is proven.
⚖️ Purpose:
To protect public interest and shareholder rights, especially in companies where mismanagement or fraud is suspected, but not necessarily proven yet.
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