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Procedure to be followed to alter the registered office clause in the Memorandum of Association

November 22, 2021
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This article has been written by Mukul Vats pursuing the Diploma in Law Firm Practice: Research, Drafting, Briefing and Client Management from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Tanmaya Sharma (Associate, Lawsikho). 

Introduction

A Memorandum of Association (MoA) represents the authorization of the company. The company can take up only those ventures that are mentioned in the Memorandum of Association. As such, the MoA specifies the limits beyond which the actions of the company are not permitted. 

Memorandum of Association assists the shareholders, creditors, and any other person dealing with the company in knowing the roles and responsibilities of a company and its business plans. MoA has to be signed by 2 persons in the case of a private limited company, and 7 persons in the case of a public limited company. Section 12 of the Companies Act, 2013 relates to the Registered Office of the company. 

Before authorization of the company, it is necessary to mention the name of the state where the company presently has the office. But after incorporation, the company has to disclose the exact location of the registered office. After this process, the company has to confirm the location within 30 days of its authorization. 

Shifting of the registered office must be brought to the notice of the registrar within the time specified.

Section 12 directs the companies to have a registered office. However, the notice of detailed address is required to be given in form INC-22 to the Registrar of Companies. Any change in the situation of the registered office is also required to be notified to the Registrar of Companies within 30 days in e- Form INC- 22 along with prescribed fees.

The compliance under Companies Act, 2013 for change in the registered office 

Procedure for relocating of registered office from jurisdiction of one Registrar of Companies to other within the same state:

  1. Convene a board meeting by issuing notices to all directors.
  2. Hold a board meeting and decide on:
  1. Issue notice of Extraordinary General Meeting along with clear agenda of business, draft resolution for shifting of registered office from jurisdiction of one Registrar to another, and explanatory statement to all members.
  2. Hold the extraordinary general meeting on the appointed date and time and obtain the approval of members.
  3. File form MGT – 14 within 30 days of passing of the special resolution along with notice of EGM, Certified True Copy of special resolution with explanatory statement annexed thereto.
  4. Apply for seeking confirmation from the Regional Director (under whose jurisdiction the existing registered office of the company is situated) in e- form INC-23 along with a prescribed fee, accompanied by the following documents [Section 12(5) R/w Rule 25 Chapter 2]
  5. Board Resolution for relocating of registered office;
  1. Obtain a confirmation order from Regional Director for shifting of registered office from jurisdiction of one Registrar to another and file the same with ROC in form INC-28 along with the prescribed fees within 60 days from the date of an order [Section 12(6)].
  2. Notify Registrar in e-form INC–22 within 30 days from the receipt of confirmation order of Regional Director along with prescribed fees and accompanied by the required documents [Section 12(4)].
  3. Get the new address of the registered office printed on all company’s business letters, billheads, letter papers, notices, and other official publications (Section 12).

How to shift the office from one state to another?

  1. Convene a board meeting by issuing notices to all directors.
  2. Hold a board meeting and decide on:
  1. Issue notice of EGM along with clear agenda of business, draft resolutions for shifting of registered office from one State to another, Alteration of Memorandum of Association due to such change, and explanatory statements to all members.
  2. Hold the extraordinary general meeting on the appointed date and time and obtain the approval of members.
  3. File form MGT – 14.
  4. Publish an advertisement in the newspaper in the vernacular language within the district and in English in an English newspaper with the widest circulation within the state in which the registered workplace of the corporate is situated;

Serve, by mail with acknowledgement due, individual notice on every debenture-holder and individual of the company; 

and serve, by mail with acknowledgement due, a notice, and a replica of the application to the Registrar and the SEBI, within the case of listed corporations and to the regulative body, if the corporation is regulated underneath any statute or law for the present good.

  1. Apply for seeking confirmation from the Regional Director (under whose jurisdiction existing registered workplace of the corporate is situated) in e-kind INC-23 in conjunction with the prescribed fee, in the course of following documents [Section 13(4) read with Rule thirty Chapter 2]: 
  1. Copy of the memorandum of Association, with projected alterations;
  2. A duplicate of the final meeting at the resolution authorizing that such alteration was passed, giving details of the number of votes in favour or against the resolution;
  3. A duplicate copy of Board Resolution,
  4. An inventory of creditors and debenture holders required, to the latest practicable date preceding the date of filing of application by no more than one month with the following details:
  1. The preceding list of creditors and debenture holders shall be in the course of declaration signed by the Corporate Secretary of the corporate if any, and a minimum of two administrators of the corporate, one in all whom shall be a manager, wherever there’s one, stating that:
  1. An acknowledgement of service of a duplicate of the application with complete annexures to the Registrar and where the registered workplace is settled at the time of applying.
  2. A genuine copy of the advertisements in newspapers and notices issued to debenture-holders and creditors, copies of objections received, and tabulated details of responses in conjunction with the counter-response from a corporate received either within the electronic mode or in the physical mode in response to such advertisements and notices.

8. Once an objection has been raised:

  1. The Central Government can hold a hearing and direct the corporate to file an affidavit to record the agreement reached at the hearing and upon execution of such legal instrument, the Central Government shall pass an order approving the shifting, within  sixty days of applying;
  2. Wherever no agreement is reached at the hearings, the corporate must be compelled to file an affidavit specifying the style during which objection is to be resolved within a certain timeframe, punctually reserving the first jurisdiction to the dissenter for following its legal remedies, even once the registered workplace is shifted, and upon execution of such legal instrument the Central Government shall pass an order confirming or rejecting the alteration within sixty days of the filing of an application.

9. After obtaining an order from the Regional Director for shifting of the registered workplace from one State to a different, file the same with the registrar of every state in form INC-28 in conjunction with the fees in thirty days once receiving the order receipt.

10. Inform Registrar through e-form (INC–22) within thirty days once receiving the confirmation order from the Regional Director with the fees and attach the subsequent documents [Section 12 (4)]:

  1. The registered document of the title of the premises of the registered workplace within the name of the company; or
  2. A registered copy of lease or rent agreement within the name of the corporate in conjunction with a duplicate of rent paid receipt;
  3. Clearance from the owner or approved occupier of the premises in conjunction with proof of possession, use of the property by the corporate as its registered office; and
  4. Information concerning any service like phone, electricity, etc. showing the address of the premises within the name of the owner or document,
  5. A copy of altered Memorandum of Association;
  6. Xerox of the order of a competent authority.

11. Get the new address of the registered office printed on all company’s business letters, billheads, letter papers, notices, and other official publications (Section 12).

The shifting of registered office shall not be allowed where any cases or unresolved disputes are pending against the company. Though, on completion of these matters relocation of the registered office may be allowed. 

Conclusion

The Ministry of Corporate Affairs (MCA) issued the Companies (Incorporation) Amendment Rules, 2019 (“Amendment Rules”) on February 21, 2019, instructing all companies established on or before December 31, 2017, to complete E-form INC – 22 A to verify their registered office. The government’s measures, combined with other recently implemented stringent compliances such as director KYCs, intends to tighten the grip around dummy companies.

Companies must fill up the ACTIVE (Active Company Tagging Identities and Verification) e-form, which includes information about their registered office address as well as images of the office. The photograph must depict the company’s director or top executive who has signed E-Form ACTIVE with their digital signature. The registered office’s longitudinal and latitudinal details, as well as the number of directors, names, director identification numbers (DINs), DIN KYC status, and the statutory auditors and company secretary’s details, are all required to be filled out in the form.

Any company that fails to file this form will be marked as ACTIVE Non-Compliant in the MCA’s records and will be unable to file any other company e-forms related to changes in authorized or paid-up capital, change in registered office address, or change in directors. Therefore, the company needs to ensure all the necessary compliances.


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