Opening of branch office

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 March 2012 Can any 1 tell me what are the Statutory & Legal requirements for opening of branch office in different State of India By an Indian Company.

CA. Hari Kishan

CA. Hari Kishan (Expert)
Follow

05 March 2012 You shall be required to take local and central registration of each state as applicable.. primarily the laws to register are
1. VAT
2. Service tax
3. Labour laws
4. Profession tax
5. Excise / Service tax

CA. Hari Kishan

CA. Hari Kishan (Expert)
Follow

05 March 2012 It would be worthwhile to mention the nature of business being carried out by the co,

Further clarity should it required for the state of karnakata can be mailed to pc_chhajer@yahoo.com

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

09 March 2012 Thanks for your reply.

Our is a Service based industry.We are to open the office in the state of Kranataka, but it would be a marketing office in its nature, no purchase or sale would be carried out from there, only employee related expenses will be incurred.
In that situation what are the compliances, do we require registrations under various Statutory Acts.

Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
Follow

09 August 2024 When opening a branch office in a different state within India, several statutory and legal requirements must be fulfilled to ensure compliance with both central and state regulations. Here is a detailed guide to the requirements and procedures:

### **1. **Company Registration and Compliance**

- **Board Resolution:** Pass a board resolution authorizing the opening of a branch office and appointing a person to manage it.

- **Update Company Records:** Update the company's records to reflect the new branch office address. This includes updating the company's statutory records and registers.

### **2. **Registrar of Companies (RoC)**

- **Filing with RoC:** You need to inform the Registrar of Companies (RoC) in the state where the company is originally registered. File the necessary forms with the RoC to update the company's records about the new branch office.
- **Form 23AC**: For the balance sheet, if applicable.
- **Form 23ACA**: For the profit and loss account, if applicable.
- **Form MGT-14**: For board resolutions, if applicable.

### **3. **State Compliance**

#### **a. **Goods and Services Tax (GST)**

- **GST Registration:** If the branch office will be involved in any taxable supplies or activities, it must obtain GST registration in the new state. Since it is a marketing office and will not involve purchase or sales, check if a GST registration is necessary for compliance purposes.

- **File GST Returns:** If registered, the branch will need to file GST returns and comply with local GST regulations.

#### **b. **Income Tax Compliance**

- **Income Tax Compliance:** Ensure that the branch office complies with income tax regulations. This includes maintaining proper records and filing tax returns as required.

- **Permanent Account Number (PAN):** Ensure that the branch office has its PAN. It is usually linked to the company's PAN, but separate PAN may be required if specifically needed.

### **4. **Labor and Employment Laws**

- **Employee Provident Fund (EPF) and Employee State Insurance (ESI):** Register for EPF and ESI if applicable, based on the number of employees and the nature of the services provided.

- **State-Specific Labor Laws:** Comply with state-specific labor laws and regulations regarding employee welfare, safety, and other aspects.

### **5. **Local Compliance**

- **Local Licenses and Permits:** Depending on the nature of operations, you may need specific licenses or permits from the local municipal or state authorities.

- **Local Taxes:** Check for any local taxes or levies that might apply to the branch office, such as professional tax or property tax.

### **6. **Legal Compliance**

- **Branch Office Registration:** In some states, you might need to register the branch office with the local state authorities or municipal bodies. This registration is often needed for compliance with local regulations.

- **Statutory Compliance:** Ensure adherence to all statutory compliance requirements including, but not limited to, maintenance of statutory registers, filing of returns, and compliance with regulations under the Companies Act, 2013.

### **7. **Banking and Financial Compliance**

- **Opening a Bank Account:** Open a separate bank account for the branch office if required for financial transactions. The bank will require the branch office's address proof, board resolution, and other documents.

### **8. **Additional Considerations**

- **Legal Agreements:** Ensure that all legal agreements, including lease agreements for office space, are properly executed and comply with local laws.

- **Insurance:** Obtain necessary insurance for the branch office to cover various risks associated with its operations.

### **Summary**

When opening a branch office in a different state in India, ensure you:

1. Obtain a board resolution and update company records with the RoC.
2. Register for GST and comply with local state taxes if applicable.
3. Adhere to labor laws and register for EPF and ESI.
4. Obtain any local licenses or permits.
5. Comply with local and state-specific regulations and ensure proper legal and financial documentation.

Consulting with a legal or compliance expert can further help in navigating the specific requirements based on your industry and the state where the branch office is to be established.