Newly prescribed mandatory process for physical verification of companies’ registered addresses
To ensure the transparency in process of physical verification of the companies’ registered addresses, the Ministry of Corporate Affairs has amended the Companies (Incorporation) Rules, 2014.
Accordingly, to amend the said rules, the Ministry has notified the Companies (Incorporation) Third Amendment Rules, 2022 by delineating the provisions for “Physical verification of the Registered Office of the company” under a newly inserted rule 25B.
Registered office is a mandatory requirement under Companies Act 2013
Before moving straight to the amendment, let’s recap the prescribed provisions under section 12 of the Companies Act, 2013 which led down the mandate that every registered company must always have a registered office address within 30 days from the date of incorporation and thereafter.
Further, 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.
Mandatory Display / Publication of Address
Every company shall:
1. Have a name board pained or affixed its name and the address of its registered office on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters and characters. If the name board is in a language generally used in that locality, the details have to displayed in a language commonly used in that area.
2. Have its name engraved in legible characters on Common Seal, if any.
3. Get its name, address of its registered office and the Corporate Identity Number (CIN) along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and
4. Have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed.
It is pertinent to state that sub-section (9) of section 12 expressly prescribed that in case 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 and if any default is found to be made in complying with the requirements under section 12, then the Registrar may initiate action for the removal of the name of the company from the register of companies.
Mandatory prescribed process under rule 25A
1. The Registrar, based upon the information or documents made available on MCA 21 shall visit at the address of the registered office of the company.
2. He may cause the physical verification of the registered office for the prescribed purpose of aforementioned section 12(9).
3. Such verification shall be conducted in presence of two independent witness of the locality in which the said registered office is situated and may also seek assistance of the local Police for such verification, if required.
4. 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.
5. The Registrar shall take a photograph of the registered office of the company while causing physical verification of the same.
6. Lastly, the newly inserted rule has also prescribed the format for preparation of the report of the physical verification.
Consequences of negative report of physical verification
Accordingly, 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 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.
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