Compliance with Rule 25B of Companies (Incorporation) Rules, 2014

The Companies (Incorporation) Third Amendment Rules, 2022, an update to the Companies (Incorporation) Rules, 2014, was put to notice by the Ministry of Corporate Affairs (MCA) on August 18, 2022. 

Compliance with Rule 25B of Companies Rules, relating to the physical evidence of the company’s registrar’s office, has been released by the MCA.

Compliance with Rule 25B of Companies Rules – physical verification

The government adopted the Companies (Incorporation) Third Amendment Rules, 2022 to establish a clear process for the physical verification of recorded addresses. Following rule 25A, the MCA has adopted a brand-new rule called 25B (Physical verification of the company’s registered office).

• According to the new regulations, ROC will physically check out a company’s registered office in front of unbiased eyewitnesses.
• The Competent authority will also need to take a picture of the company’s registered office during the physical verification.
• By checking it to copies of the supporting documents gathered during the physical proof. Meanwhile, which is legalized by the building owner, ROC will verify the Company’s legitimacy.
• After the verification is finished, a full report with extensive information, such as location details and images, will be provided.
• ROC will alert the Company and the Directors if the registrar’s office is found to be unable to accept all notices.

How does physical verification work?

The physical verification of the company’s registrar’s office must take place in front of two unbiased eyewitnesses. However, who are residents of the area where the registered office is located, as per the new rule? If necessary, the ROC may also request assistance from the local police.

Report on the Compliance of Rule 25B of Companies Rules

ROC will generate the Physical Verification Report of the company’s Registered Office in the following format.

• Name of the company and CIN number.
• According to MCA 21 data, this is the company’s current address.
• The date and the letter of permission that was granted by the Registrar of Companies
• Name of the Company’s Registrar
• Date and time of the physical inspection.
• Information about the Company and a nearby landmark.
• Information about the individuals is accessible at the time of physical verification.

Attachments that should be set forth with the ROC’s Report:

• A copy of the agreement, 
• Documents of ownership, lease, or no objection certificate (NOC) from the owner or lessee at the company’s registered office.
• The registered office’s image
• A personal ID card with self-attestation

A Notice to Company and Directors

The Registrar shall issue a written notice to the Corporation and all of its directors. Therefore, specifying his intent to eliminate the name of the corporation from the register of companies. However, they are requesting that they send their representations along with copies of any pertinent documents, if any, within 30 days following the date of the notice before taking any further action. 

Therefore, under this section where the Registered Office of the Company is perceived to be incapable of accepting and admitting all information exchanges and alerts.

What can a company do to avoid penalties?

The company’s managing director, as well as other individuals in charge of the company’s management, are therefore told to take note of the aforementioned rule. Companies are advised to stringently abide by Section 12 of the Companies Act, 2013, to prevent such consequences, serious punishments on the company and its executives, and activities such as expelling the name of the company from the company’s register. However, they can prevent it by:

• Paint or affix the name of the company, its registered address, and the registered e-mail id.
• However, maintain the exact imprint on the exterior of each office where its operations take place, in a prominent position, with legible letters. Additionally, keep the same painted or affixed in the vernacular of the region where the company’s registered office is located.
• Get your company’s 
  • name and address 
  • and Corporate Identity Number (CIN),
  • printed on all of your letterhead, business correspondence, billheads, letter papers, notices, and other official publications. You should also have your company’s name printed on all of your promissory notes, bills of exchange, and other documents.

Note: If a corporation has changed its name in the past two years, it must additionally paint or affix the previous name, as well as its current name, in addition to the current name. Wherever the name of the company is imprinted the phrase “One Person Company” must appear in brackets beneath the name of the OPC.

Conclusion

The Companies (Incorporation) Third Amendment Rules, 2022, new regulations, seek to physically verify the registered address of the company. A new rule 25B is the result of this change. However, it is bringing in the limelight to discuss the primary goal of the change i.e., physical verification of the registered office of the firm.

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