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CS Executive · Company Law and Practice · Charges

Meera Traders, a stranger to Orbit Steels Ltd, wants to inspect the register of charges kept by the company at its registered office. Which statement is correct under Section 85?

Any person other than a member or creditor may inspect the company's register of charges and the instruments of charges during business hours on paying the prescribed fees. The company's articles may impose reasonable restrictions, but outsiders are not excluded altogether.

  1. AShe may inspect during business hours on payment of the prescribed fees, subject to reasonable restrictions in the articlesCorrect
  2. BShe cannot inspect because only members and creditors have the right
  3. CShe may inspect free of charge because the register is a public record
  4. DShe may inspect only the register and not the instruments of charges

Explanation

Section 85(2)(b) permits any other person to inspect on payment of prescribed fees, subject to reasonable restrictions imposed by the articles. Option B is wrong because the right is not confined to members and creditors. Inspection extends to both the register and instruments of charges.

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