Registered Office of a company is the primary location for the authorities to make any kind of correspondence. The Ministry of Corporate Affairs (MCA), on 18th August 2022, notified Companies (Incorporation) Third Amendment Rules, 2022, to further amend the Companies (Incorporation) Rules, 2014. Through this amendment, MCA has announced a new rule – 25B, on the physical verification of registered Offices of Companies. This new rule will come into effect once notified in the Official Gazette.
It has been observed in many past instances that the companies follow malpractices like, providing fictious address, attaching forged documents/falsified documents as proof of address, inappropriate maintenance of books and papers at the registered office of the company, not adhering to the law.
To control such misconducts, MCA has introduced new rule 25B through the Companies (Incorporation) Third amendment Rules 2022.
New Rule 25B
Under this new rule 25B, the physical verification of the Company’s registered office shall be conducted by ROC in the presence of two independent witnesses at the location of the Company’s registered office. Also, if required, ROC can seek the assistance of the local Police for such verification.
Existing Norms on Verification of Company’s Registered Office
Under section 12(9) of the Companies Act, 2013, the Registrar, if has a reasonable cause to believe that the company concerned is not carrying on business in a proper manner, can do a physical verification of a company’s registered office in the manner as may be prescribed.
As per Rule 25 of the Companies (Incorporation) Rules, 2014, the verification of the registered office is required to be filed in Form No.INC.22 along with the fee and supporting documents.
Earlier no manner for conducting physical verification of the company’s registered office was prescribed neither in the section nor in the rules. Now, the manner for conducting such physical verification has been put in place under the said Rules.
Will the Registered Offices of all the Company’s be Physically Verified?
The physical verification of registered office will be conducted based on discretion of registrar of companies. It is not a standard verification exercise which would be conducted on all existing or proposed companies. Where the ROC has any kind of doubt in relation to registered office address, he may use the powers provided under this new rule.
Procedure of Physical Verification of a Company’s Registered Office
For the purpose of conducting physical verification of the company’s registered office, the Registrar shall carry the documents as filed on MCA 21 in support of the address of the registered office of the company.
Further, to check the documents’ authenticity, the same should be cross verified with the copies of supporting documents of such address collected during the said physical verification, duly authenticated from the occupant of the property where the said registered office is situated.
Reporting of the Verification
The registrar is required to take a photograph of the company’s registered office during the physical verification. Once the verification is complete, a detailed report on the physical verification with various information is required to be prepared including the followings:
- Name and CIN of the company
- Latest address of the registered office of the company as per MCA 21 record
- Date of authorization letter issued by the Registrar of Companies
- Name of the Registrar of Companies
- Date and Time of Visit for physical verification of the registered office
- Location details along with the landmark
- Details of the person available, if any at the time of the visit such as the name of a person, father’s name, residential address and relationship with the company etc.
- Remarks if any
Following documents would be attached:
- A copy of the agreement/ownership/rent agreement/NOC of the registered office of the company from owner/tenant/less or
- Photograph of the registered office
- Self-attested ID-Card of the person available
- Any other document
What if registered address is found to be not capable of receiving communications?
In case, the company’s registered office is found to be not capable of receiving and acknowledging all communications and notices, the registrar of companies (ROC) shall send a notice to the company and all of its directors of his intention to remove the name of the company from the register of companies.
Further, the registrar, before taking any action u/s 248 of the Companies Act, 2013 w.r.t the removal of the name of the company from the register is also required to request the company and its directors to send their representations along with the copies of relevant documents if any within a period of 30 days from the date of the notice.
This step is a game changer in the governance behavior of the nation. Company Management and Professionals will have to be more cautious during the Company incorporation process.
