The registered office of a company is the principal place of business and the location where important company documents and notices are served. It is also the address that is reflected on the www.mca.gov.in master data and used by the Govt. Dept. for all correspondences officially to the company. While doing a company registration, one has to provide supporting documents like an electricity bill, NOC, and Rental agreement. In case, these documents are not filed during incorporation, the same can be filed in INC-22 within 30 days of incorporation. Many times, a company's address is required to be changed. Shifting the registered office from one state to another is a significant decision that may impact the company's operations and legal standing. It involves amending the Memorandum of Association (MoA), obtaining approvals from shareholders, creditors, and the government, and complying with the regulatory provisions of the Companies Act, 2013. In this GrowthX article, CA Manish Mishra talks about the complete process of shifting of registered office from one state to another state.

Click here read about how to change the registered office of company within local limits.

Reasons for Shifting the Registered Office

Companies may choose to shift their registered office to another state for various reasons, including:

• Business Expansion: The need for a more strategic location to expand operations.
• Market Opportunities: Shifting to states with better market opportunities or regulatory advantages.
• Cost Efficiency: Lower operational costs such as rent, wages, and tax benefits.
• Ease of Compliance: States with more business-friendly compliance frameworks.
• Proximity to Clients or Key Resources: Moving closer to major clients or raw material suppliers for business convenience.

Legal Framework for Shifting Under the Companies Act, 2013

The process of shifting the registered office from one state to another is primarily governed by Section 12 and Section 13 of the Companies Act, 2013.

Section 12: Registered Office of a Company

Section 12 mandates that every company must have a registered office within 30 days of its incorporation. Any change in the registered office must be notified to the Registrar of Companies (RoC). For shifting the office within the same state, the process is simpler, while shifting to another state requires a more elaborate procedure.

Section 13: Alteration of Memorandum

Section 13 deals with the alteration of the Memorandum of Association (MoA), which includes changes in the registered office clause. When a company shifts its registered office from one state to another, it must alter the "situation clause" in the MoA, which requires shareholder approval through a special resolution.

Section 110: Postal Ballot

For companies that are required to obtain approval via a postal ballot (e.g., listed companies), Section 110 comes into play. This section ensures that shareholders who cannot physically attend the meeting can still vote on the proposal.

Procedure for Shifting Registered Office from One State to Another

The process of shifting the registered office from one state to another involves several key steps. Below is the detailed procedure:

Board Meeting and Resolution

The first step is to convene a board meeting to approve the decision to shift the registered office. A resolution must be passed to authorize the drafting of a proposal and convening an Extraordinary General Meeting (EGM) to seek shareholder approval.

Special Resolution in General Meeting

The next step is to hold an EGM where a special resolution must be passed, approving the alteration of the MoA to reflect the new state of the registered office. This requires at least a 3/4th majority of the shareholders present and voting.

Approval of Alteration in Memorandum

Once the special resolution is passed, the company needs to file Form MGT-14 with the RoC to report the special resolution.

Application to the Regional Director (Form INC-23)

An application must be made to the Regional Director (RD) of the Ministry of Corporate Affairs (MCA) using Form INC-23, seeking approval for shifting the registered office. The application must include:

• Certified copies of the special resolution and altered MoA.
• A list of creditors and debenture holders.
• Proof of advertisement in newspapers.

Advertisement in Newspapers

The company is required to publish an advertisement in an English newspaper and a regional language newspaper, notifying the public and creditors of its intention to shift the registered office. The notice must provide at least 21 days for any objections to be raised.

Serving Notice to Creditors and Other Authorities

The company must also serve notices to creditors, debenture holders, and regulatory authorities like the Income Tax Department, SEBI, and others, informing them of the proposed shift.

Hearing Before the Regional Director

If any objections are raised, the Regional Director will conduct a hearing. The RD will only approve the application if satisfied that the shift will not adversely affect the stakeholders.

Filing of Form INC-28 and Form INC-22

Once the RD approves the application, the company must file Form INC-28 to report the order and subsequently file Form INC-22 to inform the RoC of the new registered office address.

MCA Forms Required for Shifting the Registered Office

Here is a list of forms that must be filed during the shifting process:

Form MGT-14

This form is filed to notify the RoC about the special resolution passed in the general meeting for shifting the registered office.

Form INC-23

An application to the Regional Director seeking approval for shifting the office from one state to another.

Form INC-26

This form is used to publish the notice of the change in a local newspaper to inform the public.

Form INC-28

After the approval from the RD, Form INC-28 is filed to submit the order of the RD with the RoC.

Form INC-22

This form is filed to inform the RoC about the new address of the registered office.

Role of the Regional Director in the Process

The Regional Director plays a key role in the shiting process, as no shift from one state to another can be finalized without the RD’s approval. The RD examines the company’s application, ensures proper compliance, and addresses any objections raised by stakeholders. ROC report is also taken by the RD to ensure that the company has no past defaults with the existing ROC before shifting to a new ROC.

Considerations While Shifting the Registered Office

Shifting the registered office from one state to another can have several implications on the company’s operations and compliance requirements:

Impact on Company’s Operations

A shift in the registered office can affect logistics, workforce, and operations. The company must plan accordingly to ensure minimal disruption.

Communications with Stakeholders

Clear communication with stakeholders, including shareholders, creditors, and customers, is essential to avoid confusion or misunderstandings.

Amendments 

The company must update its corporate documents, letterheads, website, and statutory records to reflect the new address.

Common Mistakes to Avoid

• Failing to adhere to timelines for filing forms with the RoC.
• Not addressing objections raised by creditors or regulatory authorities.
• Improper documentation or missing attachments in forms submitted to the RD.

Time Frame for Completion of the Process

The entire process, from the board resolution to approval by the RD, typically takes 3-6 months, depending on objections raised and the RD’s schedule.

Costs Involved in Shifting the Registered Office

Costs involved include government fees for filing forms, legal fees for documentation, and newspaper publication charges for advertisements. If you want a detailed cost, you can contact our GenZCFO team and we can help you.

Impact on the Company’s Legal Standing

Shifting the registered office may affect the company’s compliance requirements, such as tax registrations, labor laws, and industry-specific regulations that vary from state to state. Visit our corporate action page to learn more.

FAQs

1: Can a company shift its registered office without altering the MoA?

No, the company must alter its MoA by passing a special resolution in order to shift its registered office from one state to another.

2: What is the role of creditors in the shifting process?

Creditors have the right to object to the shifting of the registered office if they believe it could affect their claims.

3: How long does the RD take to approve the application?

The RD typically takes 30-60 days after the hearing to issue an order.

4: Can the registered office be shifted within the same state without RD approval?

Yes, shifting the registered office within the same state only requires the approval of the RoC.

5: Is it mandatory to publish a notice in newspapers?

Yes, publishing notices in newspapers is mandatory to inform the public and creditors about the proposed change.

6: What happens if objections are raised?

If objections are raised, the RD will conduct a hearing, and the company must address the concerns before approval is granted.