The government has notified Companies (Incorporation) Third Amendment Rules, 2022 vide its notification dated 18th August, 2022 to ensure a transparent process for the physical verification of companies' registered addresses, including ensuring the presence of independent witnesses and clicking a photograph of the registered office at the time of the verification.
Under the newly inserted sub-section 9 of Section 12 of the Act, a Registrar of Companies (RoC) can do a physical verification of a company's registered office if it has a reasonable reason to be assured that the company in question has not been conducting its business in an efficient way. There will be two independent witnesses required to be present during the process of verification which should belong to the same locality in which the registered office of the company is located. If required, the assistance of the local police will be also sought. Once the verification is done, a detailed report shall be prepared including location details and photographs. If the address is found to be incapable of receiving mail, the Registrar shall issue a notice to company along with its directors asking them to make their representations along with the relevant documents within thirty days from the date of the notice before proceeding further in accordance with the provisions of Section 248 of the Act.
Interpretation: This amendment is a good move to give more powers to the Registrars to physically verify the registered office address of the companies. The main advantage of this change is that it will help the ministry to keep a check on dormant or inoperative companies. This move is appreciated as if the registered office of the company is not correct, it does not receive all communications and notices sent to them thereby leading to a lot of inconvenience to the company’s stakeholders as well as to the government. This will also prevent evil-minded people from using fake addresses for unscrupulous activities. We at UComply helps the companies in filing the correct documents required at the time of incorporation of companies or during the process of change of office address to ensure that the provisions of this section does not apply to them. If the required documents are not attached with the form, then the form might get approved by the concerned Registrar, but might have to face such verification if the address is not correct. Moreover, there are some old companies which are still running business under the previous address in spite of a change in their address. Therefore, the recent amendments makes it mandatory for all companies to get their address corrected by providing correct documentary evidence for the same by filing Form INC-22.