Regulatory updates

Section 12(9) of the Companies Act, 2013¹⁵ states that if a registrar of companies has reasonable cause to believe that a company is not carrying on any businesses or operations, he/she may inter alia cause a physical verification of the registered office of the company in a prescribed manner. If any default is found in complying with the requirement to maintain a registered office¹⁶, the Registrar of Companies may initiate an action for the removal of the name of the company from the register of companies.

Rule 25 of the Companies (Incorporation) Rules, 2014 (Incorporation Rules) deals with the verification of a registered office, however, it does not stipulate any procedures for physical verification of a registered office.

On 18 August 2022, MCA notified the Companies (Incorporation) Third Amendment Rules, 2022 (Incorporation Amendment Rules), and inserted Rule 25B in the Incorporation Rules, relating to physical verification of a registered office of a company.

Rule 25B of the Incorporation Rules provides that for the purpose of Section 12(9) of the Companies Act, 2013, the registrar of companies, based upon the information or documents made available on MCA21¹⁷, must visit at the address of the registered office of the company and may cause its physical verification, in presence of two independent witnesses of the locality in which the said registered office is situated. The registrar may also seek assistance of the local police for such verification, if required.

The documents filed by the company on MCA21 in support of the address of its registered office should be cross verified with the copies of supporting documents of such address collected during the said physical verification, duly authenticated from the occupant of the property where the said registered office is situated. The Accounts Amendment Rules also provide a format in which the report of the physical verification should be prepared.

The above amendments are effective from the date of publication in the Official Gazette (i.e., 18 August 2022).

Subsequently, on 24 August 2022, MCA notified related amendments to the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 (Removal of Name Rules), and amended certain forms prescribed in the Removal of Name Rules.

To access the text of the notification, please click here

Section 12(9) of the Companies Act, 2013 read with Rule 25B of the Incorporation Rules permit a Registrar of Companies to initiate an action for removal of name of companies from the register of companies if, after a physical verification, the registrar of companies has reasonable cause to believe that the company is not carrying on any business or operations. Currently the forms prescribed in the Removal of Name Rules are silent on this aspect.

The amended forms are as follows:

• Form STK-1 (Notice for removal of names of companies from the register of companies)
• Form STK-5 (Public notice for removal of names of companies)
• Form STK-5A (Public notice by MCA).

The above amendments are effective from the date of publication in the Official Gazette (i.e., 24 August 2022).

---

To access the text of the notification, please click here

15. Section 12 of the Companies Act, 2013 deals with registered office a company.
16. Cases where the registered office is found to be not capable of receiving and acknowledging all communications and notices.
17. MCA21 is an e-Governance initiative of the Government of India that enables an easy and secure access of the MCA services to the corporate entities, professionals and citizens of India.