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Government amends rules for physical verification of companies' registered addressesThe registrar will also have to take a photograph of the company's registered office during the physical verification
PTI
Last Updated IST
Representative image. Credit: iStock Photo
Representative image. Credit: iStock Photo

The government has amended rules to ensure a transparent process for the physical verification of companies' registered addresses, including by way of having the presence of independent witnesses and clicking a photograph of the registered office at the time of the verification.

The rules under the Companies Act, 2014, have been amended by the corporate affairs ministry and will come into effect once notified in the Official Gazette.

Under Section 12 of the Act, a Registrar of Companies (RoC) can do a physical verification of a company's registered office if he or she has a reasonable cause to believe that the company concerned is not carrying out business in a proper manner.

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Now, the process for such physical verifications has been put in place under the Act.

The physical verification will be done in the presence of two independent witnesses of the locality in which the company's registered office is situated. If required, the assistance of the local police will be also sought, according to the ministry.

To check the documents' authenticity, the same 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 ministry said.

The registrar will also have to take a photograph of the company's registered office during the physical verification.

Once the verification is done, a detailed report with various information, including location details and photographs, will be prepared.

The amended rules provide for a foolproof and transparent process for physical verification of the registered address of a company, an official said.

In case, the company's registered office is found to be not capable of receiving and acknowledging all communications and notices, the registrar concerned will send a notice to the company and all its directors seeking information.

Further action, including the decision on removing the name of the company concerned from the official records, will be initiated depending on the response from the company.

The ministry has amended the Companies (Incorporation) Rules, 2014.

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 (RoC) to strike off companies.

Out of the total 1,12,509 companies, the maximum number was in Delhi at 19,464. It is followed by Maharashtra (16,023 companies), Uttar Pradesh (12,823), West Bengal (11,044) and Tamil Nadu (6,989), among other states, the ministry had said.

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(Published 19 August 2022, 22:49 IST)