Registered Office Address Rules – Then and Now
The Registered Office Address Rules – Then and Now has serious implications on today’s corporate issues, as far as company/LLP incorporation and annual maintenance, change of registered office address is concerned.
Registered office of the company- Governing Provisions
Every business entity has a principal place of business activities, which in case of partnership or other business form, is called its head office and in case of a company or a LLP it is called its registered office. The address of the situation of the registered office is one of the most important aspects during the life of a company. The registered office indicates the office of the Registrar which keeps the records of the company and enables the law-enforcing authorities and the general public to approach the company at its registered office whenever the authorities or a member of public, anywhere in the world, find the need to contact the company or serve legal notices. The jurisdiction of the court shall also be determined according to the situation of the registered office of the company. Provisions relating to the registered office shall apply to all types of companies. A company is governed in accordance with the provisions of the Companies Act, 1956 therefore, it is mandatory for a company to keep the Registrar of Companies informed of the location of the registered office and changes thereto from time to time
The Existing Norms
1. Location of the registered office of a new company
The State in which the registered office shall be situated has to be decided by the promoters at the inception of idea for incorporation of a company, since the application for availability of name is required to be submitted to the Registrar of Companies, in whose jurisdiction, the registered office shall be situated. Section 146 of the Companies Act, 1956 provides that a company shall have its registered office in the State stated in the Memorandum from the day it begins to carry on business or by the 30th day after the date of its incorporation. The intimation shall be given to the Registrar in e-Form 18 along with the fees prescribed as per Schedule X to the Companies Act.
In e-Form 18 the effective date of shifting/establishment of the registered office, the following things has to be made known to the concerned ROC :
- Complete postal address
- E-mail address
- Name and address of the nearest police station(with district and tehsil)
As a general rule of prudence, a company whose shares are held by a large number of persons who are not tied by bonds of kinship, etc., should be located as far as possible in the premises not ordinarily occupied by managing directors or manager.
2. Requirement of submission of intimation for situation of registered office to the registrar
The intimation in e-Form 18 may be filed with the Registrar electronically within 30 days from the date of incorporation of a company. However, in practice the address of the registered office is being submitted along with other documents filed with the Registrar for incorporation of a company. In such case the ‘Name availability reference number should be filed up and the address of the registered office cannot be given as the company is not registered as such.
3. Requirements of having a registered office of a company
The Registered Office of a company is an identical address for reorganization of its functions. It has the following purposes to serve:—
(i) for service of documents on a company or an officer thereof either personally or by a certificate of posting or by a registered post; [Section 51]
(ii) determination of jurisdiction of Court on a company;
(iii) determination of domicile of a company for all practical purposes;
(iv) determination of applicability of duty as per relevant Stamps Act for stamping on Memorandum of Association, Articles of Association, Share certificates and Debenture certificates, etc.;
(v) area limit for holding Annual General Meeting; [Section 166]
(vi) inspection of different registers and records as provided under the Companies Act;
(vii) place for deposit of proxies and other documents.
4. Service of documents on company at its registered office
Section 51 provides that any document may be served on a company or an officer thereof by sending it to the company or its officers at the registered office of the company by post under a certificate of posting or by registered post or by leaving it at its registered office.
5. Service of documents in the absence of a registered office
If a company has not provided the address of the registered office to the Registrar of Companies as required under the Act, in such situation documents served at an office or place used by the company for its business activities shall be considered as duly served.
6. Name and address of registered office of a company to be indicated on the outside of all its office premises
In terms of the provisions of section 147 of the Companies Act, every company shall have its ‘name board’ on the outside of its every office and business premises, in English and in the language of that region where such office is situated which shall also contain the address of its registered office. The name of the company and address of the registered office shall also be mentioned in its letterheads, bill heads, share certificates and all other documents used by the company from time to time.
7. Whether registered office in which shareholding is broad based can be located in managing director’s residence
In a particular case the registered office of a company was located at the residence of the managing directors. It was alleged that they had easy access to the company’s cash balances and made unauthorized use of them. Besides, important registers like the register of members, minute books, transfer registers, etc., were also with easy access of persons-in-charge of the affairs of the company. While, prima facie, there is no objection in law to such an arrangement, it was clear from the facts of the case that the arrangements were not justified in locating the office at their residence. For, in this case, suspicion was aroused in the minds of the shareholders, many of whom had no confidence in the management. As a general rule of prudence, a company whose shares are held by a large number of persons who are not tied by bonds of kinship, etc., should be located as far as possible in the premises not ordinarily occupied by managing directors or manager.
8. Penalty for failure to comply with the requirement
In case if a company commits default in submission of intimation to the Registrar for situation and change thereof in e-Form 18 as required under section 146 or for not keeping the name board as required under section 147 of the Companies Act, the company and its every officer who is in default shall be punishable with fine which may extend to Rs. 500 for every day during which the default continues.
The Newly Inserted Norms
W.e.f 25th December, 2012, MCA has revised and updated the requirements while filing Form 18 i.e., notice of situation of registered office for the purpose of incorporation of a private limited company. It is interesting to note that it is applicable to both new as well as existing companies. While incorporating a new Private Limited company or while shifting of registered office address, e-Form 18 shall be filed with the Registrar of Companies within whose jurisdiction the office of the company is situated along with the proof of address as additional attachments as per the following:
In case of Lease property/rented property:
- Copy of registered Lease deed/Rent agreement
- Whether sub lease/sub tenancy is provided in the agreement, if so under which clause (if applicable)
- NOC from the Lessee/Lessor/tenant.
- Copy of registered ownership deed of the owner
- Copy of Municipal Tax receipt (KMC Receipt)
In case of ownership by Director/other company:
- Copy of registered ownership deed
- Copy of Municipal Tax receipt (KMC Receipt)
- Title search report by a competent lawyer in case tax receipt is prior to 15 days of date of filing incorporation
- NOC from the owner
Also, a certification from CA/CS/CWA (in whole-time practice) shall be required stating that he/she has visited in person and made due verifications and given opinion that the premises are indeed at the disposal of the applicant of the company.