Physical verification of the registered office of the company under Section 12(9) of the Companies Act 2013

The Ministry of Corporate Affairs (‘MCA’) vide its Notification dated 18th August, 2022, has amended Companies (Incorporation) Rules, 2014 by notifying Companies (Incorporation) Third Amendment Rules, 2022. However, Companies (Incorporation) Third Amendment Rules, 2022 shall come into force from the date of their publication in the Official Gazette.

By the aforesaid amendment, a new Rule 25B shall be inserted after rule 25A in the Companies (Incorporation) Rule, 2014.

“25B. Physical verification of the Registered Office of the Company:-

1. The Registrar, based upon the information or documents made available on MCA21, shall visit at 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 witness of the locality in which the said registered office is situated and may also seek assistance of the local police of such verification, if required.
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:-
   1. Name and CIN of the company:-
   2. Latest address of the registered office of the company as per MCA 21 record.:-
   3. Date of authorisation letter issued by the Registrar of Companies:-
   4. Name of the Registrar of Companies:-
   5. Date and Time of visit for physical verification of the registered office:-
   6. Location details along with Landmark:-
   7. Details of person available, if any at the time of the visit:-
      1. Name:-
      2. Father’s name:-
      3. Residential address:-
      4. Relationship with the company, if applicable:-
   8. Remarks, if any:-
   9. Documents attached:-
      1. Copy of the agreement/ownership/rent agreement/No objection Certificate of the registered office of the company from owner/tenant/lessor:-
      2. Photograph of the registered office:-
      3. Self attested ID-card of the person available, if any:-
      4. Any other document(s):-
5. Where the registered office of the company is found to be not capable of receiving and acknowledging all communication 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.”

Please note that a new sub-section 9 to Section 12 was inserted by the Companies (Amendment) Act, 2019 [w.r.e.f. 02.11.2018 pursuant to Companies Amendment (Ordinance), 2018]. The power was given to Registrar of Companies for physical verification of the registered office if he has reasonable cause to believe that the Company is not carrying on any business or operations. Also, if any default any found in complying with the requirement of maintenance of registered office, Registrar of Companies may initiate action against the company for strike off.

It is learnt that on July 18, the Ministry informed the Lok Sabha that a total of 1,12,509 companies have been struck off from official records in a little over three years. These companies have been struck off under Section 248 (1) of the Companies Act during the period from April 1, 2019, to July 12, 2022. This section allows the Registrar of Companies to strike off companies.

Disclaimer: This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts.