Physical verification of registered office Address by ROC

In a recent directive, the MCA (Ministry of Corporate Affairs) added measures to the statute that make the procedure for “Physical address verification of Registered Office by ROC” more apparent by requiring the application’s administrators to follow additional protocols. There are several updates towards the method that company owners with a registered office address for their firm should be aware of.

What do you mean by the registered company?

A business idea is a business that is managed by a limited team of people that can cooperate to overcome its challenges. In essence, the emergence of such start-ups can be attributed to the fact that pe the founding members of any ongoing business recognize difficulties with the current system and choose to deal with these issues by establishing a new organization.

Furthermore, a start-up registration can be finished whenever the creators of the business have an initiative that has the potential to profit. However, even when people determine that perhaps the current services provided by the setup are inadequate or that they do not intend to stick with it. An organization can change its status to “Registered” by following the steps stipulated in Section 7 of the Companies Act, 2013. However, which states that “An organization is becoming a company registered when by the legislation it claims a legal validity.”

Following receipt of the designation, the organization is required to inform executives of authorization and operate within their proper supervision regularly. However, A notification is delivered to the corporation’s registrar, which is a formal location, for the corporation’s confirmation. The information gathered will be used as a legal register by any authority, or other authorized body to contact the company.

Amendment notification

The Companies (Incorporation) Third Amendment Rules, 2022 have been published by the government by the MCA notification on August 18, 2022. The MCA has enacted a new regulation, Rule 25B-Physical verification of the Company’s Registered Office, by the modified laws. The 2013 Companies Act’s Section 12(9) was completed through this guideline. On July 1, 2019, MCA amended Section 12(9) of the Companies Act, 2013. Since then, MCA’s side of the physical verification of the registered office has been pending. The MCA successfully added rule 25B.  This reform act is merely an effort to specify the process for an authorizing provision that was added via a new subsection (9) in Section 12 of the Companies Act, 2013 as revised therein 2019.

Overview of Rule25B

The registered office is covered by Section 12 of the Companies Act of 2013, and Section12(9) covers the physical verification of the registered office address. However, it states that the ROC can visit a company’s business address when he has good reason to suspect that the organization is not operating legally. Therefore, physical verification serves as the only cornerstone for this change.

A new Rule 25B – “Physical Verification of the Registrar Office” has indeed been added to the Companies (Incorporation) Rules 2014 following Rule 25A. Rule 25A, which itself is connected to Active Company Tagging Identities and Verification. It was incorporated into the Companies (Incorporation) Amendment Rules, 2019. However, which have been notifying by the Indian Government through the Department of Corporate Affairs on February 21 and came into force on February 25, 2019. 

Mandates of physical verification as per Rule 25 B

• 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.

Report on physical verification on Registered Office by ROC

It consists of information like:

• Company name and CIN number
• Recent address of the firm as per MCA21
• Date of authorization letter to the company
• 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.
• A copy of the agreement or contract,
• Documents of ownership, lease, or no objection certificate (NOC) from the owner or lessee at the company’s registered office.
• Image of registered office
• A personal ID card with self-attestation

Note: In case the registrar company fails to acknowledge all the communications made then the registrar is authorized to issue a notice to its directors showing his intention to companies. However, requesting them as per section 248 of the act gives all the relevant documents copies along with your representation in 30 days.

Section 12(9): On the off chance that the Recorder has sensible reason to accept that the organization isn’t continuing any business or tasks, he might cause an actual check of the to enlist office of the organization in such way as might be endorsed and assuming any default is viewed as made in consenting to the necessities of sub-section (1), he might start activity for the removal of the name of the organization from the register of organizations.

What are the various conditions in which ROC can conduct physical verification?

When Rule 25B is read along with section 12(9) it authorizes the ROC to conduct physical verification in various conditions:

• Assuming ROC got any kind of complaint against the Organization from some other shareholders, partners, public, and so on. In such circumstances, ROC can direct the actual confirmation of the Enrolled office of the Organization.
• If the notice or acknowledgment sent is undelivered it is assumed that the company is not maintaining its office.
• If the annual documents of the company are not filled in.
• In case the declaration for the commence is not filled.

Summing up

The new legislation known as the Companies (Incorporation) Third Amendment Rules, 2022, aims to formally confirm the registered office of the company. This alteration results in a new rule 25B. However, it is drawing attention to the key objectives of the amendment, namely, the physical verification of the corporation’s registered office.