Professionals under scanner for unethical practices
The Ministry of Corporate Affairs (MCA) has taken a serious view of professionals who help companies incorporate by falsely certifying they have visited the premises of the intended registered office. Company secretaries, chartered accountants, cost accountants and advocates are allowed to make this certification. To curb practice of formation of shell companies, the government wants field officers and regulators like ICSI, Institute of Chartered Accountants of India (ICAI) and Institute of Cost Accountants of India to be vigilant and to sensitize professionals about this requirement.
As part of the paperwork of incorporating a company, professionals have to certify they have “personally visited the premises of the proposed registered office given in the form" and that the office will function from there after incorporation. Despite having provisions for punishment, such practices of false certification are being adopted by many professionals.
As per experts, the requirement of verifying the proposed premises of a company to be set up is important from the perspective of regulatory oversight but it may not be viable or feasible to leave that responsibility solely upon professionals like company secretaries, cost accountants and chartered accountants. It is recommended to explore an alternative solution to this key requirement.
