Regulatory Alert – Amendments to the Companies (Incorporation) Third Amendment Rules, 2022

The Ministry of Corporate Affairs (MCA) issued a notification on 18 August 2022 for an amendment to the Companies (Incorporation) Third Amendment Rules, 2022 (The Amended Rules) by insertion of Rule 25B providing for physical verification of the Registered office of a Company.

The key highlights of Amended Rules are summarised below.

• As per the Amended Rules, the Registrar, based upon the information or documents made available on MCA 21, shall visit the address of the registered office of the Company and may cause the physical verification of the said registered office for the purposes of Section 12(9) of the Companies Act, in the presence of two independent witnesses of the locality in which the said registered office is situated and may also seek the assistance of the local Police for such verification if required
• 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
• 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 its directors, 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 thirty days from the date of the notice before taking further actions under the provisions of section 248 of the Act

BDO Comments

The existing rules provided for submission of documents evidencing proof of the Registered Office of a Company. The Registrar used to visit the Registered Office only to ascertain whether the Company was in operation. Through the Amended Rules, the onus is on the Registrar to physically verify the Registered Office at the time of incorporation to check the authenticity of the address