Shifting of Registered Office – One Person Company Registration

Special Resolution- shifting of registered office within the State [Section 12 (5),(6) and (7) of Companies Act, 2013]

Section 12(5) of the 2013 Act requires that a special resolution be passed to shifting the registered office-

(a) 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 the 2013 Act or where it may be situated later by virtue of a special resolution passed by the company, and

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(b) In the case of any other company, outside the local limits of any city, town or village where such office is first situated or where it may be situated later by virtue of a special resolution passed by the company. This corresponds to s. 147 of the 1956 Act.

Section 12(3) of the 2013 Act also provides that a company can change the place of its registered office from the jurisdiction of one Registrar to the jurisdiction of another Registrar within the same State, only upon getting such change confirmed by the Regional Director. This corresponds to section 146 of the 1956 Act. Under the 2013 Act, section 12(6) provides that the Regional Director should communicate his confirmation to t Act he company within thirty days (while the 1956 Act provided for four weeks). The Company in turn shall file the confirmation w Registrar within a period of sixty days of the date of confirmation (while the 1956 Act provided two months). The Registrar shall register the same and certify the company registration within a period of thirty days from the date of filing of such confirmation and such certificate shall be conclusive evidence that all the requirements of 2013 Act under section 12(5) have been complied with [s. 12(7) of the 2013 Act]. The change is effective only from the date of the certificate.

Penalty for default [Section 12(8) of Companies Act, 2013]

In case of any default in complying with provisions of section 12 of the 2013 Act, the company and every officer in default shall be liable for a penalty of one thousand rupees for every day during which the default continues, subject to a maximum of one lakh rupees.

Compoundable offence

Offence under this section is compoundable under section 441 of the 2013 Act. Shifting of registered office within the same State-(1) An application seeking confirmation from the Regional Director for shifting the registered office within the same State from the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies, shall be filed by the company with the Regional Director in Form No. INC. 23 along with the fee. The company shall, not less than one month before filing any application with the Regional

Director for the change of registered office

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a)publish a notice, at least once in a daily newspaper published in English and in the principal language of that district in which the registered office of the company is situated and circulating in that district; and

(b) Serve individual notice on each debenture holder, depositor and creditor of the company, clearly indicating the matter of application and stating that any person whose interest is likely to be affected by the proposed alteration of the memorandum may intimate his nature of interest and grounds of opposition to the Regional Director with a copy to the company within twenty one days of the date of publication of that notice:

Provided that in case no objection is received by the Regional Director within twenty one days from the date of service or publication of the notice, the person concerned shall be deemed to have given his consent to the change of registered office proposed in the application:

Provided further that the 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.

Section 12 of the 2013 Act adopts the provisions of sections 17A, 146 and 147 of the 1956 Act dealing with the registered office of a company. However, section 12 of the 2013 Act makes a few distinctions regarding One Person Company and time period granted for compliance, which has been discussed above. These differences must be borne in mind while referring to the case law and commentary on sections 17A, 146 and 147 of the 1956 Act set out below.

Section 17A of Companies Act, 1956

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As per section 146 of the 1956 Act (which corresponds to section 12 of the 2013 Act), the registered office of a company may be shifted-

(i) Outside the local limits of the city, town or village within the State by way of a special resolution;

(ii) To any other place within the same city, town or village on the authority of a resolution passed by the Board of directors of a company.

Section 17A of the 1956 Act lays down the procedure to be followed for changing the location of the registered office within the State. The provisions have to be complied with apart from making an application to the Regional Director for communication of the change of place of registered office within the same State. Although not so stated under sub-section (4), the company is required to file a certified copy of the order of the Regional Director with both the Registrars of Companies within the same State. The plain language of section 17A of the 1956 Act (shows that the Regional Director’s confirmation is necessary in case of shifting of registered office of a company within the same state from the jurisdiction of one ROC to be jurisdiction of other ROC. The intention is to cover such cases in which there are more than one ROC offices in one State, for example, Tamil Nadu (one in Chennai and one in Coimbatore) and Maharashtra (one in Mumbai and one in Pune) and the shifting involves the change of jurisdiction of such Registrars. Under the 2013 Act, the procedure and formalities for shifting of registered office within the State is provided in Rule 28 of Companies (Incorporation) Rules, 2014.

Section 146 of Companies Act, 1956

Section 146 of the 1956 Act requires that the registered office of an existing company as well as a new company shall not be removed outside the city, town or village where it is situate, in the state except on the authority of a special resolution of the company. In case of shifting of the registered office from the jurisdiction of one Registrar to another within the State, confirmation of Regional Director is required under section 17A of the 1956 Act. The change of registered office from one State to another will however require the confirmation of CLB under the provisions of s. 17 of the 1956 Act.

Intimation to Registrar [Section 146(2) of Companies Act, 1956]

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Removal of the registered office from one place to another within the same city, town or village, does not however require any special resolution, though notice of such change should be given to the Registrar. It is wrong to contend that a resolution to change the registered office is sufficient and the only effect of the failure to notify is to render the company liable for a fine.

Section 12(4) of the 2013 Act also stipulates that notice of every change of the situation of the registered office shall be given to the Registrar. Section 146 of the 1956 Act stipulated  30 days’ notice to be given within 30 days of change while section 12(4) of the 2013 Act provides fifteen days from the date of change to give notice of change of the situation of registered office of the company.

Shifting of registered office outside the “local limits”

Clause (a) of sub-section (2) of section 146 of the Companies Act, 1956, lays down that the registered office of an existing company shall not be shifted outside the local limits of any city, town or village where such registered office is situated unless the company passes a special resolution to that effect. As a result of rapid urbanization, cities frequently tend to expand beyond municipal limits. In view of this, the expression “local limits” in the aforesaid section of the Companies Act should be taken to mean the local body limits and the postal limits, and where the two do not coincide, the wider of the two. This circular was issued in the context of section 156 of the 1956 Act. It can be used to interpret the meaning of local limits under section 12(5) of the 2013 Act too.

Penalty for default (Section 146(4) of Companies Act, 1956]

The registered office of a company can be removed from the city, town or village where it is situated only on the authority of a special resolution of the company. Any default in compliance with this requirement will attract penalty for the company and every officer of the company who is in default by way of fine which may extend to Rs. 500 for every day of default. The liability for prosecution and punishment is that of the officer of the company who is in default. All the directors of the company will be officer-in-default only when there is no managing director, whole time director, manager, secretary, a person charged by the Board with the responsibility of complying with the provisions of the Act and the Director/Directors specified by the Board under section 5(g).

Importance of registered office

The importance of registered office to a company as discussed below in the context of Indian and English cases will be relevant to the provisions of the 2013 Act as well.

 Domicile and residence

 The situation of the registered office of a company determines domicile for all purposes. On the situation of the registered office depends the place where the company is to be registered and the State of the country and the court which will have jurisdiction over it. For purpose of jurisdiction of the High Court to wind up companies, the registered office means the place which has longest been the registered office of the company during the 6 months immediately preceding the presentation of the petition for winding up. The name of the company and full address of the registered office is to be published as required by s. 147 of the 1956 Act (s. 12 of the 2013 Act) outside the various offices and places of business of every company and also in all letter heads, bills and other documents specified in that section.

Service of documents

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Where the registered office of a company had been pulled down and the officers of the company were working at a place of business which was not registered, the court ordered that the petition for winding up should be served upon the secretary and two of the directors at the unregistered working place. Similarly where a company, though not formally dissolved, had practically ceased to exist and had no office or officer, the company being made a defendant in a suit, the court ordered that service of the summons on the former chairman and secretary of the company should be good service.

Where however the registered office of the company is intact and working, a service on the company’s solicitor or local manager, though accepted by them, was not a good service unless service was presented at the office of the company also. These cases go to show that the requirement of service at the residence of the company is a permissive method and not an imperative method and, therefore, constitutes only one of the several methods available for the establishing a communication with a company.

Where the registered office of the company was intact and in existence, and though the company was giving a different address for correspondence, it was held that the service of statutory notice under section 434 for payment of a debt, a condition necessary for presenting a winding up petition, should have been served at the registered office. The court distinguished the case from the decision in Fortune Copper Mining Co., because in that case the office had ceased to exist by reason of the demolition of the building in which it was housed. Where a company carries on business in a foreign country at a definite and reasonably permanent place that will constitute residence of the company so as to render the company subject to the jurisdiction of the courts of that country. But even so the company remains a resident of its original country of incorporation. Thus, a company can have more than one place of residence.The affixture of suit summons on the registered office of the company is sufficient service.

Where the notice for execution proceedings could not be served upon the company and it was returned by the bailiff under the remark “that there was no such company at the address given by the petitioner” and therefore the execution proceedings were dismissed, it was held that if the address filed by the company with the Registrar was wrong or if the address supplied by the Registrar was wrong, they could be prosecuted for violation of the requirements of sections 146, 147 and 234 of the 1956 Act but they could not be sued under these sections for the recovery of the decretal amount. The decree holder cannot ask that the fine money should be used for satisfaction of the decree. His remedy is to seek execution of the decree at the exact address or initiate winding up proceedings.

All the formalities to inform the ROC of the change in the company’s registered office were completed The ROC had started addressing all its communications to the company at the changed address. But the Registrar did not record the new address, because of non-payment of fee for a long period. The service of the statutory demand was, therefore, not made at that address. The petition was dismissed for that reason.

Service of winding-up petition at registered office

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 The directors were barred from registered office when the winding-up petition was served at that office. The court said that it was incumbent upon directors to make a suitable arrangement to ensure that documents served on the company at its registered office during the period of the revocation would come to their notice and there was no reason for the owners or any other creditor to suppose that the directors had not made such arrangements. Accordingly, the directors could not complain that they had not been served with winding-up petition. For more clarification about One Person Company Registration in Coimbatore, kindly visit our site and feel free to make a call. We “Solubilis” will assist you in a right way. Thanks for reading!!!

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