Physical Verification of Registered Office by ROC

Registered Office is the primary location for the authorities to make any kind of correspondence. In the past times, it has been found that there have been instances where following malpractices have taken place at time of incorporation of Companies:

1. A fictious address has been provided at the time of incorporation

2. Falsified documents being attached as proof of address

3. Books and papers not being maintained at registered office of the company as per the requirement of legal provisions.

To curb such malpractices ministry of corporate affairs introduced a rule 25B in the Companies (Incorporation)Rules, 2014 through Companies (Incorporation) Third Amendment Rules, 2022

Powers with ROC pursuant to rule 25B of Companies (Incorporation) Rules, 2014

1. Power to cause physical verification at registered office address of Company

Note: ROC shall be accompanied by at least two independent witnesses of locality in which registered office is situated

2. Power to seek assistance of Local Police: The ROC on its discretion may take assistance from the local police.

3. Power to serve notice under section 248 of Companies Act, 2013 to directors, proposing striking off the name of companies from register of companies: Such a notice would be served by ROC where he believes that registered office address is not in a position of receiving acknowledging all communication and notices.

Directors of such company are required to furnish their reply within 30 days from the date of notice

Duties of ROC pursuant to rule 25B of Companies (Incorporation) Rules, 2014

1. To carry documents as filed on MCA 21 portal in support of address of registered office (for eg. Conveyance deed, lease agreement, rent agreement, utility bill, No Objection certificate from owner (as the case may be)

2. Cross- Verification of premise of registered office with the above-named documents.

3. To take photographs of the registered office (which will act as evidence for physical verification)

4. Preparation of Report as per the format provided under rule 25B of Companies (Incorporation) Rules, 2014

Such a step would be game changer in the governance behaviour of the nation. Professionals will thus be required to be more cautious while taking up any incorporation assignment.

It is advisable that professionals cross verify the documents related to registered office address before providing their certification.

Important Note: 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.