Who can apply for investigation of affairs of a company

Who can apply for investigation of affairs of a company? What are the matters to be specified in the application?

The following can apply for investigation of affairs of a company:

1.Central Government, on the Report of Registrar

Section 235(1) empowers the Central Government to order investigation into the

affairs of a company on the report of the Registrar.

Section 235 of the Act provides as follows:

Where a report has been made by the Registrar under Section 234(6) or under Sec.

234(7) read with sub-section (6), the Central Government may appoint one or more competent persons as Inspector to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct.

It may be noted that Section 234(6) empowers the Registrar to report in writing to the Central Government if the information or explanation called for by him under Sec. 234(1) is not furnished in time, or if, on perusal of such information or explanation or on examination of the books and papers produced before him, he is of the opinion that the state of affairs of the company is unsatisfactory. Under Section 234(7), the Registrar can report to the Central Government if a contributory or creditor, etc. makes a representation to him that the business of the company is being carried on in fraud of creditors, etc., or otherwise for fraudulent or unlawful purpose.

2. Shareholders

Section 235(2) of the Companies Act, 1956 empowers the Company Law Board to consider an application from a specified number of shareholders and to declare that an investigation be conducted into the affairs of the company. Upon such declaration by the CLB, the Central Government shall appoint one or more competent persons to investigate the affairs ,of the company and to report thereon in such manner as the Central Government may direct.