Registrar of firms given 3 weeks for classification

Wednesday, July 9 1997

Registrar of firms given 3 weeks for classification

Manju Dalal

Bangalore, July 8: The Department of Company Affairs has directed the Registrar of Companies to classify all companies registered with it as public and private limited companies. According to a departmental communique issued on June 24, all RoCs are directed to complete the classification within three weeks.

"The segregation will equip the department in monitoring big and mid-cap companies closely," sources at DCA said, adding that the whole exercise has been initiated following the CRB fiasco.

According to sources, the companies are to be divided into public and private limited categories with the public limited companies further classified into listed and unlisted ones.

Based on the authorised capital, the public and private companies will be classified separately into eight categories, states the DCA communique. The first category will consist of companies with authorised capital less than Rs 1 lakh. The companies having authorised capital of Rs 1 lakh but not more than Rs 5 lakh will fall under the second category. The third category will comprise of companies with capital between Rs 5 lakh to Rs 10 lakh.

The subsequent categories will have increased authorised capital with the last group containing companies of authorised capital above Rs 25 crore.However, doubts have been raised on the segregation of big companies on the basis of authorised capital. "Such classification will be faulty as companies may have paid-up capital less than the authorised capital," said an RoC official.

"We will look into the matter," said TS Krishnamurthy, secretary, department of company affairs. The RoCs have been asked to computerise the registration of public companies on a priority basis, he added.

The classification work in Karnataka, which has over 20,000 companies, started on Monday. To begin with, the RoC office at Bangalore has started computerising the registration work. The process will be completed within a week, said an RoC official, adding that the traditional method of making entries into ledgers will be stopped. As regards the classification of companies, the RoC is considering approaching the Bangalore Stock Exchange to seek details of public and private companies.