Companies incorporated in India carry their business through a registered address known as registered office. Companies may have various branch office, godowns, factories to operate their business but it is imperative for all company to register one official place as its registered office address. Such address is required as to locate the Company, send correspondence to the Company at a particular address, decide the jurisdiction of the Company etc.
Companies get themselves register with one address however they always have this liberty to shift their registered office address from one place to another after following the manner as prescribed under Companies Act, 2013.
Many time situations arise where Company have to move its business from one state to another, in such scenario Company needs to shift it registered office from the existing state to another. For example: ABC private limited was registered at Delhi but due to government policies or expansion plans, etc. Company proposed to move from Delhi to Mumbai. This will result in change in registered address due to change in state.
This article summarises the concept and process of shift in registered office from one state to another.
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. Section 12(5) states that except on the authority of a special resolution passed by a company, the registered office of the company shall not be changed—
In the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act or where it may be situated later by virtue of a special resolution passed by 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. Section 13(4) states that the alteration of the memorandum relating to the place of the registered office from one State to another shall not have any effect unless it is approved by the Central Government on an application in such form and manner as may be prescribed.
Rule 27 of the Companies (Incorporation) Rules, 2014 deals with notice and verification of change of situation of the registered office.
Rule 30 of the Companies (Incorporation) Rules, 2014 specifies shifting of registered office from one state or union territory to another state.
Process to shift registered office of the Company from one state to another
Section 13 of Companies Act, 2013 and Rule 30 of the Companies (Incorporation) Rules, 2014 majorly specifies the process through which a Company can shift its registered office from one state to another.
Below given is a summarised procedure for change in registered office of the Company.
- Any director or person authorised by the Board will dispatch a notice to call for Board Meeting. Notice shall be given as per section 173 of Companies Act, 2013 read with secretarial standard 1 on Board Meetings.
- Conduct Board Meeting to consider the shift in registered office of the Company.
- Pass the board resolution after assent of the board members and call for a general meeting for approval of members:
- to approve the shift in registered office from one state to another;
- to approve alteration in situation clause of Memorandum of Association;
- to authorise any director or any authorised person to sign relevant forms, certified copy of resolution and other document as may be required to give effect to this resolution.
- to authorise any director or any authorised person to make newspaper publication
- Dispatch notices for calling an Extra Ordinary General Meeting (EGM)/Annual General Meeting (AGM) to all the members in accordance with provisions section 101 of Companies Act,2013 read with secretarial standard 2 on General Meetings.
- Accord approval of Members through Special Resolution at Extra Ordinary General Meeting (EGM)/Annual General Meeting (AGM) for change in registered office.
- File E-form MGT-14 to submit special resolution with the Registrar of Companies.
- Simultaneously, publish a newspaper advertisement in the Form No.INC.26in the vernacular newspaper in the principal vernacular language in the district and in English language in an English newspaper with wide circulation in the State in which the registered office of the company is situated;
Any person whose interest is likely to be affected by the proposed change of the registered office of the company may deliver or cause to be delivered or send by registered post of his/her objections supported by an affidavit stating the nature of his/her interest and grounds of opposition to the Company within 14 days from the date of publication.
- Simultaneously, Individual Notice is to be served by registered post to each creditor and debenture holder.
- After expiry of 14 days, Intimation to be given to the Chief Secretary of the state regarding the proposed shifting and that the no employee shall be retrenched as a consequence of shifting of the registered office from one state to another state. Application to be submitted with relevant documents like board, special resolutions, various declaration by KMP and Directors, list of creditors, copy of newspaper publication with objections received if any.
- Notice and copy of application to be submitted to the Registrar.
- File an application to the Regional Director in E-Form INC-23 for shifting the registered office from one state to another and copy of application will also be submitted physically.
- If no objection is received from creditors or any person to the notice or advertisement the application may be put up for orders without hearing and the order either approving or rejecting the application shall be passed within fifteen days of the receipt of the application.
- If objection received, the Central Government shall hold a hearing or hearings, as required and direct the company to file an affidavit to record the consensus reached at the hearing, upon executing which, the Central Government shall pass an order approving the shifting, within sixty days of filing the application.
where no consensus is reached at the hearings the company shall file an affidavit specifying the manner in which objection is to be resolved within a definite time frame, duly reserving the original jurisdiction to the objector for pursuing its legal remedies, even after the registered office is shifted, upon execution of which the Central Government (Regional Director) shall pass an order confirming or rejecting the alteration within sixty days of the filing of application.
- Post-approval from the Regional Director, Company shall file the order in E-Form INC-28within thirty days from the date of receipt of certified copy of the order.
- After filing of form INC-28, E Form INC-22 to be filed for intimation to the registrar regarding shift in the registered office.
Points to remember
- As per section 12 of the Act, change in Registered office from one state to another requires consent of Members through Special Resolution and approval of Regional Director.
- As per section 110 of the Act, companies having members more than two hundred are required to pass the resolution for change in place of registered office outside the local limits of any city, town or village through postal ballot.
- E Form MGT-14 is to be filed prior to filing E form INC-23as SRN of MGT-14 is to be filled in E-form INC-23.
- E Form INC-28 to file prior to filing E Form INC-22 as SRN of INC-28 to be filled in E-form INC-22.
- A duly authenticated copy of the list of creditors shall be kept at the registered office of the company and any person desirous of inspecting the same may, at any time during the ordinary hours of business, inspect and take extracts from the same on payment of a sum not exceeding ten rupees per page to the company
- The company shall, not more than thirty days before the date of filing the application in Form No. INC.23 publish the advertisement.
- Shifting of registered office shall not be allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act.
- The order passed by the Central Government confirming the alteration may be on such terms and conditions, if any, as it thinks fit, and may include such order as to costs as it thinks proper.
Post approval Compliances
After getting approval from the Registrar, Company should follow below given action points:
- Revise the registered address in all its business letters, billheads, letter papers and in all its notices and other official publications.
- Print new set of Memorandum of Association.
- New address should be displayed on the Name Plate of the Company as displayed outside the office.
- Intimate the change in registered office to all banks where Company have accounts so that all communication made by Banks should be delivered at correct address.
- Similarly, Company should inform all its vendor, parties, suppliers and other stakeholders regarding the shift in registered office.
- Change in registered office also to be updated with government departments where Company has registered itself like Income tax authority, GST, Shop & Establishments and any other department where Company is registered.
Shifting of registered office from one state to another involves lots of paperwork and regulatory compliance as two states are concerned. Interest of employees, creditors and other stakeholders are also affected. Thus Companies are advised to follow detailed procedure as given above.
It is pertinent to note that the above stated regulatory framework are as per Companies Act, 2013 only, If any Company is registered with other any regulatory bodies like SEBI, RBI, MSME, IRDA , Companies have to follow additional compliance as prescribed by different regulators under which Company is registered