The Ministry of Corporate Affairs (MCA) has inserted a new Rule B in the Companies Act, 2013, which requires companies to physically verify their registered office with the Registrar of Companies (ROC). Previously, Rule B only required companies to maintain documentary proof of their registered office.
This new rule is intended to prevent companies from using fake documents to legitimise their registered office. The purpose of this rule is to prevent companies from filing false documents with the ROC. It is also intended to prevent companies from moving their registered office without valid reasons. Companies that fail to comply with this rule may face fines and other penalties.
Background Of Rule 25B
The Ministry of Corporate Affairs (MCA) issued a notification, i.e. Rule 25B, with an aim to provide physical verification of registered offices of companies in India by ROCs. The objective of the rule is to curb tax evasion and frauds through use of dummy registered offices.
Rule 25B will be applicable to all companies that have a total paid up capital of ₹ 100 crore or more as on the balance sheet date of 31stMarch, 2017. A company need not be registered with the MCA to avail services of ROCs for verification of registered office. However, such a company will have to comply with other statutory requirements such as filing annual returns and furnishing annual information statements.
The physical verification will be done by an appointed officer/agent/registered representative of an ROC carrying out on-site inspection at the registered office premises. The purpose behind issuing Rule 25B is to ensure compliance with Indian corporate law provisions and prevent tax evasion and
Why Is Rule 25B Needed?
Rule 25B of the Companies Act, 2013 is aimed at speeding up physical verification of registered offices of companies in India. The rule has been introduced to address the issue of incorrect or incomplete physical verification of registered office.
The physical verification of a registered office is an important step in the process of register a company in India. This verification ensures that the company has a valid registered office and that its physical assets are located at that address.
If you want to start or expand a business in India, you will need to comply with Rule 25B. You will need to physically verify your registered office with the relevant authorities to ensure compliance with Indian law.
Physical verification can be done by visiting the ROC in your state or by sending a representative to take stock of the company's physical assets. Once the verification is complete, you will receive a certificate confirming that your registered office is correct.
If you have any questions about Rule 25B or about complying with it, please contact us today. We can help you to understand and comply with this important rule.
When Will Companies Start Carrying Out Physical Verification?
Companies will begin carrying out physical verification of their registered office in India under new Rule B introduced by the MCA. This rule is part of the efforts by the MCA to improve transparency and accountability in the corporate world.
Under Rule B, companies will have to carry out physical verification of their registered office every six months. This will help to ensure that companies are complying with Indian law and regulations. The physical verification will be carried out by a ROC, or a registered agent.
Companies that do not comply with the rule could face penalties, including suspension of their business licenses and seizure of assets. The MCA expects compliance with Rule B to improve transparency and accountability in the corporate world.
What Does This Mean for Companies?
Companies that have not complied with this rule may face action such as suspension or cancellation of their registrations. In addition, any directors or officers who are found to be responsible for non-compliance may also be liable to penal sanctions.
The physical verification of a registered office is a routine process which is to be carried out by the Registrar of Companies (ROC) in order to ascertain if the registered office is indeed situated at the given address or not
All companies intending to carry out physical verification of their registered office are advised to take all necessary precautions and contact their ROC for specific instructions on how to carry out physical verification of the registered office in an effective and timely manner.
Having gone through the entire article, it can be seen that MCA inserts Rule B for physical verification of registered offices of companies by ROC in India. As per this rule, a company has to appoint a representative in each State and Union Territory so as to carry out physical verification of its registered office. Besides, such representatives have also been mandated with other important responsibilities such as ensuring proper functioning of the E-Governance system and filing annual returns with the Registrar of Companies (ROC).
Also Read: Tamil Nadu: Cop Help 29-Yr-Old Pregnant Woman Deliver Baby At Arakkonam Railway Station