SEARCH REPORT -A Basic Tool for Inspection of Companys Records in Hands of

Stakeholders Specially Banks

Now a day, Banks are more emphasizing on demanding Search Repots from Limited
Companies while opening of Bank Accounts or giving the Loan to such Companies. The need
for Search Reports arises to keep themselves (Banks) safe and to ensure that the company is
not the defaulting one or having not the defaulting directors and to know the complete history
and information about the company.

Search Report in context to, Companies under Companies Act, 1956 and Banks, means a
report generally prepared by Professional CA/CS/CWA/Advocates about the company after
detailed inspection from the records of the Registrar of Companies.

It generally includes:

Name of Company

Registered Office Address of the Company

Capital Structure of the Company

List of Directors of the company since incorporation

List of Shareholders of the company since incorporation

List of Registered Charges since incorporation etc.

The Report may include the other matters also as per the demand of the Bank
Officials.

A search report traces the history of a company or 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 before reaching the present Bank who has demanded the Search Report. This
is an important part of a loan process by Banks to the Companies. A search report is usually
prepared and drafted by Professionals, who after visiting the registrars office (Registrar of
Companies) and inspecting the property documents, issues the certificate to the Bank stating
the facts about the company.

Search Report is mainly beneficial and demanded by following persons/ entities:

By The Banks: Search Report are the basic tool in the hands of the Banks to know about the
viability of their customer who approach the banks for CC Limits, Term Loans or otherwise.
As the sole moto of the Banks is to provide the loan to the customers is for earning the
interest. Hence the Banks want the current position of the assets being pledged by the
companies. And the only way to know whether such property is already pledged to some
other bank or not, is the Search Report. In such search reports, the Professional gives the
complete information about the loans already taken by the company. 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 Charge/ pledged against such loan

6. The Terms and conditions of such loan i.e.

(i) The rate of interest

(ii) Terms of Repayment

(iii) Margin Money

(iv) Extent of Operation

Modification: If the charge has been modified during the continuation of such charge, the
details are also provided that on which date the charge had been modified and what was the
nature of such modification.

Charge Satisfaction: If any time any charge is satisfied, i.e. the whole amount is paid back by
the company to the Bank, Form 17 in respect of Charge Satisfaction is being filed, and the
information about such satisfaction is also provided by the Professional in such Search
Report, on demand of Banks.

By Shareholders: Shareholders may also demand the Search Repot of the company for the
following reasons:

To now the status of the company

To know the status of their shares held in the company i.e. how many shares they
held, on which date their shares were being transferred, from whom the shares were
being transferred

To know about the Directors in the company

To know about the complete history as per ROC records since incorporation before
investing in such company

By Directors:

An individual before becoming the Director of the company may get the Search
Report prepared from Professional

To know about the Present Directors of the company

 To know the Assets and Liabilities of the company

To know about the complete history as per ROC records since incorporation.

Customer and Suppliers

Before entering into any agreement/ contract with the company, the suppliers or the
Customers get the Search Report drafted.

Government Authorities:

Government Authorities like Income TAX Authorities, RBI, SEBI ETC. can also get the
Search Report drafted to know the present status of the company and various other financial
filed by the company to the concerned Registrar of Companies.