Significance of Registered Office
Every Company must have an office where all communications made to Company is to be addressed, an address which marks the official address of the Company. Such address is required so that stakeholder can make proper correspondence with the Company.
Further registered office of Company is also important to decide for jurisdiction of the Company and to identify the registrar where all filings and applications of the Company will be submitted.
Changes in the Registered Office of Company
As mentioned earlier, registered office holds significance for any Company. However after setting up of business, owners always have an option to change their registered address. The need for shift in registered office can arise from many reasons like:
- Increase in rent of existing office
- Shifting to bigger premise for expansion
- Expanding business to other state
- Easy accessibility of services at other place
- Commuting and transport facilities
- Change in government policies
- Location of competitors etc.
Registered Office of the Company in Incorporation process
Every Company must decide official place for its Company in advance as such registered address is to be mentioned at the time of making application of incorporation. In case applicant is not able to get any place to start its business till application, applicant can mention any correspondence address in incorporation form and later applicant is required to confirm to the Registrar, details of its registered office within 30 days of its incorporation.
In the incorporation application, applicant need to mention the “State” in the Memorandum of Association from where Company will operate. This clause is known as “Situation Clause”. As per the format of Table A, below given is narration for situation clause in Memorandum of Association.
“II Clause: The registered office of the company will be situated in the State of……………………………..”
Legal Provisions under Companies Act, 2013 regarding Registered Office
Section 7 of Companies Act, 2013 states that, at the time of incorporation, Company has to mention its address of correspondence till its registered office is established.
Section 12 of Companies Act, 2013 deals in length regarding the timelines and other provisions which require compliance by the Company. It also specifies the process to alter the registered office of the Company.
Section 13 of Companies Act, 2013 also deals with the alteration of the memorandum of association relating to the place of the registered office.
Rule 25 of the Companies (Incorporation) Rules, 2014 deals with the verification of Registered Office of companies.
Rule 27 of the Companies (Incorporation) Rules, 2014 deals with notice and verification of change of situation of the registered office.
Rule 28 of the Companies (Incorporation) Rules, 2014 prescribes provision of shift in registered office of the Company within the same state.
Rule 30 of the Companies (Incorporation) Rules, 2014 specifies shifting of registered office from one state or union territory to another state.
In this article we will explain the types of changes in registered office but before getting to know these types it is necessary to understand a term “Local Limit” which will be used frequently in change of registered office concept.
What are Local Limits?
Companies Act,2013 does not define what is local limit. However one clarification is available which was issued by Department of Company Affairs on interpretations on various section of Companies Act, 1956
As per Circular No. 19, dated 26-6-1972, it was clarified that as a result of rapid urbanization, cities frequently tend to expand beyond municipal limits. In view of this the expression local limits should be taken to mean both the local body limit and the postal limits and where the two do not coincide, the wider of two.
Thus local limit can be understood by decoding pin code.
The first digit of PIN Code indicates one of the regions. The second digit indicates the sub region or one of the postal circles (States). The third digit indicates a sorting / revenue district. The last 3 digits refer to the delivery Post Office.
For Example: PIN code of Registrar of Companies Delhi & Haryana is 110019
Any change in last 3 digit in above case “019” means change in local limits
Thus change in last 3 digits will show whether shift of registered office is within local limits or not.
Types of Changes in Registered Office
Registered office of companies can be shifted in below given manner:
1. Change within local limit of city, town or village
For example: Registered office is situated in Delhi at Place A and Company shift from A to B which is also situated within the local limit of place A but situated at Delhi.
2. Change outside local limit of city, town or village within same ROC and State.
For example: Registered office is situated in Delhi at Place A and Company shift from A to B which is situated outside the local limit of place A but situated at Delhi.
3. Change in ROC within the same state
For example: Registered office is situated at Mumbai and it got shifted to Pune then state will be same but ROC are different as in Maharashtra there are two ROC situated at Mumbai and Pune.
4. Change in state within jurisdiction of same ROC
For example: There are various states that have same ROC like Assam , Meghalaya, Manipura, Tripura, Mizoram, Nagaland & Arunachal Pradesh have their ROC at Guwahati.
Thus any change in either of state will be a change in state but ROC will remain same.
5. Change in state outside the jurisdiction of existing RO
For example: Registered office is situated in Delhi and it is shifting to Bangalore, then such change will be in state outside the jurisdiction of existing RO.
Each type of change can be undertaken after complying with the different provisions as given under the Companies Act, 2013. Companies are required to adhere to these guidelines for change in their registered office address.