Introduction
The registered office of a company is the main office to which all communication relating to the company is sent by governmental departments. During incorporation, a company's promoters must declare its registered office in its Memorandum of Association and keep certain documents, like the mandatory statutory registers, at the registered office. This article will explain where a company should have its registered office, whether it can be altered and other requirements per the Companies Act, 2013.
Importance of a registered office
(a) The company must keep the statutory registers at the registered office in accordance with the Act. The existing Act allows for these registers to be kept electronically, which has lessened the necessity for this provision.
(b) The company's registered office is where documents and registers, such as the register of charges and members and copies of all the returns it has filed, can be inspected.
(c) The registered office is where all notices and communications are issued.
(d) Documents may also be served on the company physically or via registered or standard mail at the registered office address. The company secretary, director, or chief executive officer of the corporation is typically served with notices from the various agencies.
A company could have offices spread out across the country. There could be a head office, a corporate office, or a correspondence address. It was held in Vysya Bank Ltd v. Randhir Steels and Alloys (P) Ltd, that even though the registered office of the corporation may not be operational, the demand under section 434(1)(a) of the 1956 Act (which is a demand by the creditor for repayment of the debts), is required to be served there. This condition cannot be waived by the company.
Analysis of Section 12 of the Companies Act
According to the section, a company must set up its registered operational office on the 15th day of its incorporation and maintain it after that. Every communication and notice that is addressed to the office should be able to be received and acknowledged by the office. [S. 12(1)] Within 30 days of incorporation, the company must provide verification of its registered office in the manner authorised. [S. 12(2)]
Every company must take the following actions:
(a) It must paint or affix its name and registered office address to the outside of each office or location where it conducts business. It must be in a prominent place, with readable characters, and in a language that is widely spoken in that region and it must be written in that language's characters.
(b) the name must be engraved in legible characters on the seal.
(c) all business letters, bill heads, letter papers, notices, and other official publications must bear the name.
(d) the name must be printed on hundies, promissory notes, bills of exchange, and any other prescribed documents.
When a name is changed, the previous name shall continue to be used for a period of two years together with the new name. One-Person-Company must be put after the company name in cases when it is a one-person company. [S. 12(3)]
Change in the registered office
Within 15 days, the Registrar must be notified of any change of registered office circumstances that have been confirmed in the way specified. [S. 12(4)] The following alterations to the registered office's location may only be made with the approval of a special resolution:
(a) in the case of an existing company, moving the registered office outside the municipal limits of any city, town, or village where it was located at the time the Act was passed or where it may have been moved by the company's special resolution;
(b) in the event of any other company relocation of the office outside of any city, town, or village where it was initially located or later by the company's special resolution.
So long as the change in the registered office is within the boundaries of the city or town where it is located, it can be implemented by following a standard procedure of getting the consent of the Board of Directors.
In addition to other procedures, the shareholders must approve any change in registered office from one state to another. The company should call a shareholder meeting and request their permission by special resolution. Shabbir Ahmed v. Safedabad Cold Storage & Allied Industries Ltd. held that when the substantial shareholder was not given notice of the general meeting to approve the modification, it was determined that the change was invalid and illegal. Apart from seeking the approval of shareholders by special resolution, the company must submit an application in accordance with rules 28 and 30 of the Companies (Incorporation) Rules, 2014, in order for the regional director to confirm the change in the registered office when it occurs within the same state and between the jurisdictions of two different registrars.
No corporation may move its registered office from one Registrar's jurisdiction to another registrar's jurisdiction within the same state unless the Regional Director grants the request in a specified manner. Within 30 days after the application, the Regional Director must confirm the relocation, and within 60 days of the date of confirmation, the company must file the relocation with the Registrar.
Within 30 days, the Registrar must certify the registration. The Registrar's certificate serves as convincing proof that the Act's provisions were followed. [S. 12(3–7)] Any violation of the section is punishable. For each day the default persists, the corporation and each official in default are subject to fines of up to Rs 1,000,000. [S. 12(8)]
Alteration of the Registered Office
Changes to the registered office or the objects may have an impact on the company's creditors, dealers, and workers, in addition to its shareholders. Because of this, the objects can be changed by a special decision, and the registered office can be moved from one state to another with the Central Government's approval [S. 13(4)]. The Central Government must decide upon the application within 60 days. Before making a decision, it must be certain that the alteration has the support of the company's creditors, debenture holders, and other stakeholders. Alternately, the Central Government must be convinced that the company has made enough provisions for the timely repayment of all of its debts and obligations or that sufficient security has been provided for such repayment. [S. 13(5)] The Registrar of each State must receive, within the allotted period, a certified copy of the order of the Central Government sanctioning the adjustment. The same must be registered by the Registrar. A new certificate of incorporation must be issued by the Registrar of the State where the registered office is being moved to reflect the change. [S. 13(7)]
No objections may be raised by someone who was neither a stakeholder nor a creditor of the corporation. In the case of Seaways Maritime (P) Ltd., re, the person challenging the shift was the managing director's personal creditor. Despite his criminal charges against the managing director, he lacked locus standi because there were no allegations or mala fides against the company.
In Upper Ganges Sugar & Industries Ltd., re, the Central Government confirmed a company's special decision to move its registered office from West Bengal to Uttar Pradesh. In that case, the company had no manufacturing units in West Bengal and all of its manufacturing units in Uttar Pradesh.
In Neelchal Auto Ltd., re, it was acceptable for a company to move the registered office to Pune if it possessed manufacturing facilities in both Maharashtra and Bihar and had begun a significant expansion programme in Maharashtra. Its Bihar branch was to carry on as usual.
Conclusion
As seen throughout this article, a registered office is very important for a company as it is the basis for all communications and letters. Hence, a company should be very cautious about following all the required protocols while making changes or alterations to the registered office during and after incorporation.
References
- Avtar Singh, Company Law.
- A Ramaiya: Guide to The Companies Act, 19th ed, Vol 1.
- Vysya Bank Ltd v. Randhir Steels and Alloys (P) Ltd, (1993) 76 Comp. Cas, 244 (Bom.).
- Shabbir Ahmed v. Safedabad Cold Storage & Allied Industries Ltd, (2017) 141 SCL 26.
- Seaways Maritime (P) Ltd., re, (2009) 39 CLA 49.
- Upper Ganges Sugar & Industries Ltd., re, (2000) 27 SCL 369 (CLB).
- Neelchal Auto Ltd., re, (2000) 38 CLA 217 (CLB).
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