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Shambhavi Suyesha
| Updated: 23 Aug, 2022 | Category: Event Based Compliances

New Rules regarding Physical Verification of Registered Address of Company

Registered Address of Company
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The Companies (Incorporation) Rules, 2014, notified under the Companies Act, was amended for the third time on 18th August 2022 by the Ministry of Corporate Affairs (MCA)[1]. By this Amendment, a new Rule regarding the physical verification of the registered address of company has been inserted. In this blog, we will discuss the overall analysis of this new Amendment named Companies (Incorporation) Third Amendment Rules, 2022. 

The Original or Principal Rules, i.e., Companies (Incorporation) Rules, 2014, were published in the Official Gazette of India on 31st March 2014 and were last amended on 8th April 2022.  

New Rules on Registered Address of Company 

The new Companies (Incorporation) Third Amendment Rules, 2022 have been notified to ensure a transparent process for physical verification of any company’s registered address as well as the process of having the presence of independent witnesses and taking photographs of the registered address of company’s office at the time of verification. 

Notification

The Government of India, via the Ministry of Corporate Affairs, has notified on 18th August 2022 of the Companies (Incorporation) Third Amendment Rules 2014 in the exercise of powers conferred under Sections 3, 4, 5 (5) (6), 6, 7 (1) (2), 8 (1) (2), 11 (1) (a)(b), 12 (2) (3) (4) (5) (9), 13 (3) (4) proviso of (5), 14 (2), 17 (1), 20 (1) (2) and 469 (1) (2) of the Companies Act 2013.  

The Rule will come into force on publication in Official Gazette. 

Insertion of Rule 25B

Section 12 of the Companies Act 2013 talks about the company’s registered office, and its sub-section (9) mentions the physical verification of the company’s registered office address. It states that the Registrar of Companies may physically verify a registered address of company’s office and if he has a reasonable cause to believe that the concerned company is not carrying out business properly. And this physical verification is the sole ground of this Amendment. 

In the Companies (Incorporation) Rules 2014, after Rule 25A, a new Rule 25B has been inserted with the heading “Physical Verification of Registered Office of the Company”. Rule 25A was inserted by the Companies (Incorporation) Amendment Rules, 2019 and is related to the ACTIVE (Active Company Tagging Identities and Verification), and this Companies (Incorporation) Amendment Rules 2019 was notified by the Government of India via the Ministry of Corporate Affairs on 21st February 2019 and came into effect from 25th February 2019. Rule 25A was inserted after Rule 25, which talks about the verification of registered office. 

Overview of Rule 25B

The New Rule 25B talks about the Physical Verification of the Company’s Registered Office. The Registrar, on the basis of the information or documents available on MCA 21, must visit the registered address of company office and may also conduct physical verification of the said registered company’s office for the purpose of Section 12 (9) of the Companies Act 2013, in the presence of two independent witnesses of the same locality of the registered office. During such verification, if required, he may seek the assistance of local Police. 

Registrar must carry the documents filed in support of the address of the registered office of the company for the physical verification and also to check the authenticity of the same by cross verifying with the documents of such address obtained during the physical verification and duly authenticated from the occupant/ owner of the property where the said registered office of the company is situated.

The Registrar must take pictures of the registered address of company’s office during the physical verification. 

The Registrar prepares the physical verification report in the prescribed format only. The report must contain following details:

  • Name and CIN (Company Incorporation Number) of the Company
  • Recent address of the Company’s Registered Office as per the record of MCA 21
  • Date of authorisation letter issued by the Registrar of Company (ROC)
  • Name of Registrar of Company 
  • Date and time of physical verification of the registered office of the company 
  • Details of location along with landmark 
  • Details of the person available at the visit for physical verification including his name, father’s name, residential address and relationship with the company (if applicable).
  • Remarks (if any)

This report must include the date and place along with the official’s signature, name and designation with the official address. 

Documents to be attached in the report are as follows:

  • Copy of the agreement, ownership, rent agreement or No Objection Certificate of the registered address of company’s office from the owner, tenant or lessor.
  • Photograph of the registered office
  • Self-attested ID Card of the person available at the time of verification
  • Any other required document (s).

If the company’s registered office is found to be not capable of receiving and acknowledging all notices and communications then the Registrar must send a notice to the company and its directors writing his intention to remove the name of the company from the Register of Companies and requesting or asking them to send their representations along with copies of all the relevant documents within 30 days from date of notice before taking further actions in accordance with the provisions of Section 248 of the Companies Act, 2013. 

Conclusion

New Rules, namely Companies (Incorporation) Third Amendment Rules, 2022, aim to verify the registered address of company physically. By this Amendment, a new rule 25B has been inserted, which talks about the main focus of this Amendment, i.e., physical verification of the company’s registered office. 

Read our Article:Removal of Company Name from ROC under MCA’s new Companies Amendment Rules, 2022

Shambhavi Suyesha

Shambhavi holds a strong legal background, having completed her BA LLB and LLM. She is particularly interested in legal research and writing, and wishes to utilise her knowledge to create informative legal content. She is an analytical researcher and keeps herself updated about the current legal affairs. She also holds prior experience in publishing articles on assorted legal areas.

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