Rule 25B The Companies (Incorporation) Rules, 2014

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Physical verification of the Registered Office of the company

Safeguarding Transparency and Compliance in Indian Companies

In a significant move to promote transparency and compliance within the Indian corporate landscape, the Ministry of Corporate Affairs (MCA) introduced Rule 25B within the Companies (Incorporation) Rules, 2014. This rule empowers the Registrar of Companies (ROC) to conduct physical verification of a company’s registered office, ensuring its authenticity and ability to receive official communications.

Key Highlights of Rule 25B:

  • Initiation of Physical Verification: The ROC may initiate the physical verification process based on information or documents available on the MCA 21 portal. This includes cases where there’s reasonable cause to believe that a company may not be conducting genuine business operations.
  • Verification Process:
    • The ROC visits the registered office address in the presence of two independent witnesses from the locality.
    • The Registrar carries necessary documents from MCA 21 for verification and cross-checks them with documents collected during the physical visit.
    • A photograph of the registered office is taken.
  • Report Preparation: A detailed report is prepared, outlining key aspects such as:
    • Company name and CIN
    • Registered office address
    • Date and time of the visit
    • Location details and landmarks
    • Information on individuals present during the visit
    • Remarks and observations
    • Attached documents (e.g., rent agreement, NOC, photographs, ID proofs)
  • Non-Compliance Consequences:
    • If the registered office is found incapable of receiving communications, the ROC sends a notice to the company and its directors, stating the intention to remove the company’s name from the register.
    • The company is given 30 days to provide representations and relevant documents before further action under Section 248 of the Companies Act, 2013.

Strengthening Corporate Governance in India

Rule 25B serves as a crucial tool to ensure that companies maintain genuine and accessible registered offices, fostering greater transparency and accountability within the Indian corporate ecosystem. It reinforces the importance of adhering to compliance norms and upholding ethical business practices, contributing to a more robust and trustworthy business environment in India.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with a qualified legal professional for specific guidance regarding Rule 25B and its implications for your company.

Provisions of Rule 25B The Companies (Incorporation) Rules, 2014

(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 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 for 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 where at 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:-

Report on Physical Verification of the Registered Office of the Company:

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 the person available, if any at the time of the visit-

(i) Name:-

(ii) Father’s Name:-

(iii) Residential address:-

(iv) Relationship with the company, if applicable:-

8. Remarks if any:-

9. Documents attached:-

(i) Copy of the agreement/ownership/rent agreement/No Objection Certificate of the registered office of the company from owner/tenant/lessor:-

(ii) Photograph of the registered office:-

(iii) Self Attested ID-Card of the person available, if any:-

(iv) Any other document(s):-

Date:

Place:

Signature

Name and Designation of the official with official address.

(5) 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.”.

Amendment

1. Inserted by Companies (Incorporation) Third Amendment Rules, 2022.

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