Change in Business Compliances

Procedure related to Shifting of Registered Office Under Companies Act, 2013

A registered office of any company is its official address where one can communicate to. It is decided at the time of incorporation of the company. The Companies Act, 2013 provides for procedures to be followed in case there is any change in the registered office of the company. A registered office of the company has a lot of significance, and therefore in this article, we shall understand the various provisions and the procedure related to shifting of registered office under the Companies Act, 2013, and Listing Regulations.

What is the need of a Registered Office for a business?

According to the records of the Government Organisations and a company’s record, a registered office is the official address. It is beneficial for the corporate in the following ways:

• A registered office may be used to conduct essential meetings related to the business, whereby it shall save the cost required for the arrangement of such meetings.
• It is a one-stop destination for all communications for and through the company so that no essential communication is missed.
• It helps in building the corporate stature of a business and brings more transparency in the business.
• A company with a registered office is more reliable in the eyes of a stakeholder.
• It is a place where all confidential documents or the records of the company are stored. It is mandatory for the companies to maintain their statutory registers and annual return and other essential documents at the registered office.
• The registered office is also used for the purpose of all communication received by the company from the government department.

It is necessary to note that in case of non-compliance with the required provisions, a penalty would be imposed under Section 128.

What is the need for shifting of Registered Office?

Sometimes, for better management or for some compelling reasons, a company may require shifting of registered office of a company. It may be shifting from one state to the other or even shifting within one state or shifting within the limits of city, village, or town. The cause for such change could be due to one or multiple reasons. Few of them have been discussed below:

• In case, major activities of business shifts from one place to other;
• In case most of the management of the company is situated in some other location other than the registered office;
• Considering better convenience with respect to managing the affairs of the company;
• If shifting of registered office causes a reduction in the cost of company expenses and saves time;
• Any other reason as the company thinks fit.

Procedure for shifting of Registered Office of a company from one place to another within the same state

The following procedure is followed for shifting of Registered Office:

• A notice concerning the holding of the board meeting is given to all directors.
• Then the board meeting is held, and the required quorum must be present in the meeting.
• The necessary resolution on the following matters is passed:
  1. Proposal of shifting of registered office from one place to the other within the same state and the reason for the same must be stated.
  2. Authorization of two directors or company secretary for resolving the matter that is precedent and incidental in respect of above.
  3. Call for an extraordinary general meeting and fix the day, time, and venue of shareholder meeting in order to obtain approval for the same.
  4. Review the draft of the resolution passed in the general meeting with the explanatory statement, which means the proposal of shifting of registered office and the alteration of the situation clause of Memorandum of Association.
• Issuance of notice of the Extraordinary General Meeting at least 21 days prior to the date of the general meeting to all the shareholders. The notice of the meeting is served in order to obtain the consent of creditors, debenture holders, and depositors.
• The notice of advertisement regarding the shifting is published in the newspaper along with the amendment of Memorandum of Association in a newspaper, and six copies of notice regarding the general meeting are sent to the stock exchange.

(In case of a listed company, certain regulations are complied with. The listed entity is required to first disclose to stock exchange of all events, as mentioned in part A of Schedule III, or information as soon as possible and it must not be later than 24 hours from the occurrence of such event that is material as per the opinion of the board under regulation 30 (Disclosure of Events and Information)).

• The general meeting is held on the chosen date, and the required quorum must be present in the meeting, and the member’s approval is taken by passing the special resolution.

(In case of a listed company, certain regulations are complied with. The listed entity shall, as per regulation 30, disclose all proceedings of Annual General Meeting (AGM) or EGM to the stock exchange, i.e., the minutes of the meeting. It must not be later than 24 hours from the occurrence of such event that is material as per the opinion of the board.)

(The e-voting facility is provided to the shareholder as per Regulation 44 that deals with the Meeting of shareholders and voting.  The conclusion of the general meeting must be submitted within 48 hours to the stock exchange along with the details of voting results in the manner specified by the board.)

• After the special resolution is passed, Form MGT-14 is filed within 30 days of passing of such resolution. It must be filed with certified copy special resolution passed in the general meeting and with altered Memorandum of Association and prescribed fee.
• Thereafter an application seeking the confirmation from the regional director regarding the approval for shifting of registered office from one place to the other is submitted in Form INC-23^[1]. It shall be submitted along with the following prescribed documents and fee once 30 days have expired from publishing a newspaper advertisement under Rule 28 of Companies Incorporation Rules, 2014:
  • A board resolution certified true copy for shifting of the registered office,
  • Special resolution from the company for approving shifting of registered office,
  • Minutes of the general meeting,
  • Latest list of members or shareholders of the company is furnished drawn up to not less than one month,
  • Altered Memorandum of Association.
  • A declaration must be made in the form of an affidavit provided by the KMP or any two directors who are authorized by the board stating that the company has not defaulted in the payment to its workmen like salary etc. and has either taken the consent of its creditors for shifting through the arrangement of meeting or has made necessary provision for payment thereof.

The following procedure is followed for taking the consent of creditors-

1. Prepare a list of creditors and workmen and mention their name, address, and the amount due.
2. Give a notice for convening EGM in order to obtain the consent of creditors on the proposal of shifting of registered office.
3. Hold the meeting and make sure that all the creditors are present during the meeting and receive the acknowledgment regarding the above-mentioned purpose.

OR,

The following procedure is followed for making necessary provision to make payment thereof-

1. Prepare a list of creditor and workmen and mention their name, address, and the amount due.
2. Person authorized may make necessary provisions in finances for their payment.
3. In the case of any pendency of cases in the court, a declaration in the form of the affidavit will help in obtaining the proposal of shifting registered office.
4. The list of creditors and debenture holders.
5. An affidavit that verifies the application.
6. Power of Attorney or vakalatnama or board resolution.
7. An affidavit by the directors and company secretary with respect to the correctness of the list of creditors and affairs of the company.
8. A mandatory copy of the advertisement in the newspaper for a notice regarding shifting of registered office.

• Once the regional director examines the application, he shall provide the confirmation to the company in 30 days from the date such application is received.
• The company then files the copy of the order made by the regional director to the registrar in the Form INC-28 within 60 days from the date of confirmation along with the copy of the order, and the registration is certified within 30 days from the filing date of such confirmation as per Section 12(6) of the Act.
• The company then files for notice of shifting of the registered office to the Registrar of Companies in Form INC-22 within 30 days of such change and the following documents shall also be enclosed therewith:
  • Address proof of Registered Office like Conveyance, lease deed, rent agreement, etc. with rent receipts.
  • Copy of utility bills or proof of any utility service like electricity bill, gas, telephone, etc. which contains the address of the premises and which is not more than two months old, should be attached.
  • It is mandatory to attach the altered Memorandum of Association.
  • An authorization specifying that the company may use the address. It should be from the owner of the premises or the occupant, along with the evidence of such ownership. It is mandatory in case the registered office belongs to any other entity or person.
  • It is mandatory to get a certified copy of the order of the regional director.
  • List of companies using the same registered office address, if any.
• Once the company obtains the Certificate of Incorporation from the Registrar, the company will update its business document, common seal, if any, and website, if any.

(In case of a listed company, certain regulations are complied with. The listed entity is required to make any change in the content of its website within two working days since the date such change in content occurred as per Regulation 46.)

Essential points to remember while shifting of Registered Office

There are some practical aspects which must be kept in mind while shifting of the registered office of the company. These aspects are specified below.

• While making such a change, it is critical to update and intimate about such change to the bankers related to the company;
• Amendment in the Permanent Account Number; (Read – New PAN Card Rules)
• Intimate various statutory authorities like (DGFT) Director General of Foreign Trade;
• The statutory registers maintained by the company should be shifted to the new registered office. The annual return of the company, register of debenture holders, members and such registers may be kept at a place apart from the registered office where more than 1/10^th of the members reside after passing a special resolution and after giving the Registrar the copy of the intended resolution in advance under Section 94 of the Companies Act, 2013;
• The book of accounts may also be shifted to the new registered office. It can be kept at any place in India other than the registered office as the Board of Directors may decide as per Section 128 of the Companies Act, 2013.

Essential E-Forms to be filed

Some of the essential e-forms and their use pertaining to the change in the registered office are mentioned in the table given below.

E-Form	Usage	Time Limit of the Form
MGT-14	For special resolution	Within 30 days of passing the special resolution
GNL-1	For filing copy of application to the Registrar of Companies	To be filed along with Form INC-23
INC-23	For seeking approval of the Regional Director	Minimum one month after giving notice to creditors and after publication of advertisement in the newspaper
INC-22	For shifting of the registered office	Within 15 days of the order passed by the Regional Director
INC-28	For filing RD order with the Registrar of Companies	Within 30 days of the order passed by the RD

Conclusion

Considering the rapidly evolving nature of the business, change may occur at any time. Likewise, the company, in order to seek more growth due to government policies or for better management, may opt for shifting of registered office from one place to the other. The procedures and formalities with respect to such change in registered office may vary from situation to situation. Therefore, the filing of the documents and all applications must be done keeping in mind the necessary requirements for each situation.