Physical Verification of Registered Office by ROC

We have been receiving queries from companies, particularly not-for-profit companies licensed under Section 8 of the Indian Companies Act 2013, with regard to the implications of the new Rule 25B in the Companies (Incorporation) Rules, 2014, through Companies (Incorporation) Third Amendment Rules, 2022.  More importantly the question whether anything needs to be done in terms of compliance with Rule 25B?

In our opinion nothing needs to be done. Physical verification of the ‘Registered Office’ of companies will be conducted at the discretion of the Registrar of Companies (ROC). It will not be a standard verification exercise to be conducted on all existing or proposed companies. Only where the ROC has any kind of doubt in relation to the registered office address, he may use the powers provided under this new rule.

Background

In order to identify active companies and to verify their registered office, the Ministry of Corporate Affairs (MCA) had on 21st February 2019 issued Companies (Incorporation) Amendment Rules, 2019 whereby every company, including a company having license under section 8 of the Indian Companies Act 2013 or under section 25 of the erstwhile Indian Companies Act 1956 and incorporated on or before the 31st December, 2017 was required to file  important details of the company and its registered office in e-form ACTIVE (INC – 22A) on or before 25th April 2019.

Active Company Tagging Identities and Verification was back then a new concept introduced by MCA, vide Companies (Incorporation) Amendment Rules, 2019 which was made applicable from 25th February 2019.

Companies Incorporation Amendment Rules, 2019

New Rule 25A had been inserted in Companies Incorporation Rules, 2014 under Verification of Registered Office and according to which: “Every company incorporated on or before the 31st December, 2017 shall file the particulars of the company and its registered office in e-form ACTIVE (Active Company Tagging Identities and Verification) on or before 25.04.2019.”

What is registered office?

Registered Office is the primary location for the regulator (ROC) to make any kind of correspondence.

Reason for the recent amendment

In the past it was found that a fictitious address would be provided at the time of incorporation together with false proof of address. Further, records would not be maintained at the Registered Office of the company.

To curb such malpractices the Ministry of Corporate Affairs has now introduced Rule 25B in the Companies (Incorporation) Rules, 2014 through Companies (Incorporation) Third Amendment Rules, 2022 empowering the ROC to cause physical verification of the registered office address of the Company, if required.

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