Physical Verification of Registered Office of the Companies by ROC

ELP Logo Black Text

Physical Verification of Registered Office of the Companies by ROC The MCA vide notification dated 18/08/2022 has notified Companies (Incorporation) Third Amendment Rules, 2022 to insert a new rule in Companies (Incorporation) Rules, 2014, which pertains to physical verification of the registered office address of the Companies. This rule 25B is added to make the existing sub-section (1) and sub-section (9) of section 12 fully functional.

Following new rule 25B shall be inserted after the existing rule 25A 25B. Physical verification of the Registered Office of the company 1)

The Registrar, based upon the information or documents made available on MCA 21, shall visit the address of the registered office of the company and may cause the physical verification of the said registered office for the purposes of sub-section (9) of section 12, in presence of two independent witnesses of the locality in which the said registered office is situated and may also seek the assistance of the local Police for such verification if required.

CS Bhavesh Chheda | Affluence Advisory Pvt. Ltd. | Website- www.affluence.net.in | Email: Connect@affluence.net.in

2)

The Registrar shall carry the documents as filed on MCA 21 in support of the address of the registered office of the company for the purposes of physical verification and to check the authenticity of the same by cross verification with the copies of supporting documents of such address collected during the said physical verification, duly authenticated from the occupant of the property whereat the said registered office is situated.

3)

The Registrar shall take a photograph of the registered office of the company while causing physical verification of the same.

4)

The report of the physical verification shall be prepared in the following format namely: a) Name and CIN of the company: b) Latest address of the registered office of the company as per MCA 21 record: c) Date of authorization letter issued by the Registrar of Companies: d) Name of the Registrar of Companies: e) Date and Time of Visit for physical verification of the registered office: f) Location details along with Landmark: g) Details of the person available if any at the time of the visiti.

Name: ii.

Father's Name: iii.

Residential address: iv.

Relationship with the company, if applicable: h) Remarks if any: i) Documents attached: i.

Copy of the agreement/ownership/rent agreement/No Objection Certificate of the registered office of the company from owner/tenant/lessor: ii.

Photograph of the registered office: iii.

Self-Attested ID - Card of the person available, if any: iv.

Any other document(s):

5)

Where the registered office of the company is found to be not capable of receiving and acknowledging all communications and notices, the Registrar shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of relevant

CS Bhavesh Chheda | Affluence Advisory Pvt. Ltd. | Website- www.affluence.net.in | Email: Connect@affluence.net.in

documents, if any, within a period of thirty days from the date of the notice before taking further actions in accordance with the provisions of section 248 of the Act.

Existing provisions of sub-section (1) of section 12 are as under: A company shall within thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.

Existing provisions of sub-section (9) of section 12 are as under: If the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may cause a physical verification of the registered office of the company in such manner as may be prescribed and if any default is found to be made in complying with the requirements of sub-section (1), he may initiate action for the removal of the name of the company from the register of companies.

Our Opinion on the implications of the newly inserted Rule 25B: 1.

If ROC has reasonable cause to believe that the company is not carrying any kind of business or operations or does not have an updated registered office or correspondence address capable of receiving and acknowledging all communications and notices for whatsoever reason it may cause a physical verification of the address provided by the company.

2.

After conducting physical verification, if ROC is of the opinion that the company is not capable of receiving and acknowledging all communications and notices as may be addressed to it, then they will send a notice to the company and all the Directors specifying its implication to remove the name of the company from the Registrar.

3.

Before proceeding with the removal of the name of the Company from the registrar the ROC will give a reasonable opportunity of being heard by the opponent and it may allow its authorized representatives to submit their statement/documents within 30 days of issuing Notice, falling to which the company may strike off the company under Section 248 of the Act.

CS Bhavesh Chheda | Affluence Advisory Pvt. Ltd. | Website- www.affluence.net.in | Email: Connect@affluence.net.in

This amendment by MCA will enable ROCs an absolute and unconditional power to physically verify the registered office address of the Companies registered with the MCA. Although sub-section (9) of section 12 was inserted vide the Companies (Amendment) Act, 2019, however, the same was not fully functional as specific rules in this regard were missing. However, post to this amendment, ROCs can now freely verify the registered office address of those companies which are believed by the concerned ROC to be not carrying on any business or operations and initiate proceedings under sub-rule (5) of rule 25B where the registered office of the company is found to be not capable of receiving and acknowledging all communications and notices.

This move will enable the stakeholders such as banks, creditors, or other government authorities, etc. to reach the authenticated registered office or correspondence address of the Company or to timely send the communication/notice to the Company and curb the practice of giving fake addresses or non-operational office addresses and reduce the chances of excuses relating to non-receipt of notice or documents, etc.

Disclaimer: This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover the specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Affluence Advisory Private Limited to discuss these matters in the context of your circumstances. Affluence Advisory Private Limited, Its Partners, Directors, Employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.

CS Bhavesh Chheda | Affluence Advisory Pvt. Ltd. | Website- www.affluence.net.in | Email: Connect@affluence.net.in