Shifting of registered office

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11 August 2010 what is the procedure to shift registered office from one state to another ?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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11 August 2010 The steps involved in changing the registered office from one state to another state

1. Call for a board meeting to decide on the change in the domicile clause.

2. In the board meeting fix up the date, time, place of the general meeting and approve the notices for this purpose, send the notices, hold the meeting and pass special resolutions.

3. After taking the approval of the members, file a certified copy of the special resolution along with the explanatory statement in Form 23 with ROC.

4. Publish a general notice in at least one regional language newspaper and one English language newspaper circulated in the area in which registered office of the company is situated clearly stating the substance of the petition.

5. Send individual notices to all creditors/debenture holders of the company.

6. After a gap of one month from the date of sending notices as above, file petition with the Company Law Board (CLB) pursuant to the CLB Regulations, 1991. The petition has to be filed with the Regional Bench
of the CLB at which the existing registered office is situated.

7. Serve a copy of the petition on the ROC.

8. Serve a copy of the notice along with a petition to the Chief Secretary to the Government of the State where the registered office of the company is situated or to the Administrator/Lt. Governor of the Union Territory where the registered office is situated in the Union Territory.

9. A hearing may take place at the CLB office at which creditors, if any, and the representatives of the company are heard before making any order.

10. After receiving the CLB order for shifting the registered office, the company is required to file certified copy of the order with the ROC along with Form No. 21 within 3 months of receipt of certified copy along
with the printed copy of the memorandum of association .

11. A certified copy of the order from the ROC within one month of the date of filing must be obtained.

12. The certified copy of the order should be filed with the ROC of the new state within one month of the date of the filing along with the certified copy of the memorandum of association.

13. The ROC of the new state i.e. at which registered office will be shifted will issue a fresh certificate of incorporation which will be conclusive evidence of the shift of registered office.

14. File Form No. 18 with the new ROC for the situation of the registered office

15. Necessary changes are required to be made in the letter heads ,books, records etc. of the company.

16. Arrange to adopt new common seal of the company.

Ankur Garg

Ankur Garg (Expert)
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11 August 2010 Please click the link below to download the Procedure and resolution for Shifting of the regd. office from one state to another state:

https://www.caclubindia.com/share_files/procedure-and-resolution-for-shifting-of-the-regd-office-15541.asp

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CA Sanat Pyne

CA Sanat Pyne (Expert)
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11 August 2010 Shifting of the registered office to another State
A company may, by special resolution, alter the provisions of its Memorandum so as to change the place of its registered office from one State to another so far as may be required to enable it as provided in section 17 of the Companies Act, 1956 as given hereunder:—
(a) to carry on its business more economically or more efficiently;
(b) to attain its main purpose by new or improved means;
(c) to enlarge or change the local area of its operations;
(d) to carry on some businesses which under the existing circumstances may conveniently or advantageously be combined with the business of the company;
(e) to restrict or abandon any of the objects specified in the Memorandum;
(f) to sell or dispose of the whole, or any part, of the undertaking, or of any of the undertakings, of the company; or
(g) to amalgamate with any other company or body of persons.
For change in the situation of the registered office from one State to another shall require the confirmation of the Company Law Board [Powers transferred to the Central Government vide the Companies (Second Amendment) Act, 2002] as it shall consider the alteration in the situation of the registered office clause in the Memorandum of Association of the company as per provisions of section 17 of the Companies Act, 1956. A meeting of the Board of directors will be called and held to accord approval to the following action:—
(i) seek approval of the Board of directors, preferably at a Board meeting. At the same meeting the Board may consider and fix the date, venue and time for holding a general meeting to obtain the approval of members by special resolution and the Board will approve the notice of the general meeting and explanatory statement to be sent to the members; (Specimen of the Board resolution given in Appendix 7)
(ii) hold a general meeting and get the approval of the members by way of special resolution subject to confirmation by the Company Law Board/Central Government; (Specimen of the resolution given in Appendix 8)
(iii) file certified copy of the special resolution alongwith the explanatory statement with the Registrar of Companies in e-Form 23 under section 192 alongwith filing fees as per requirement of Schedule X to the Act within 30 days from the date of the meeting;
(iv) authorise severally a Director or the Company Secretary to take steps to move a petition to the Company Law Board/Central Government and take all actions in the matter including appointing advocate to assist the company.
11. Objection to the shifting of registered office
In re, Perfect Refractories (2005) 68 CLA 72 CLB objections against shifting of the Registered Office unanimously approved by members at the General Meeting raised subsequently and without stating any reason as to how the shifting would be prejudicial to the interest of objecting shareholders.
It was contended that in Annual General Meeting, the approval of shareholders was forcibly taken for shifting of the Registered Office and the reasons given by the company for shifting were not satisfactory. Further, on perusal of the minutes of Annual General Meeting, the Chairman had recorded that proposal to shift the Registered Office was unanimously approved by the shareholders. The objectors neither in their objection memo nor during hearing indicated as to how the shifting of the Registered Office would be prejudicial to the interests of the company or the shareholders. Any reservation on the contents of the Explanatory Statement should have been raised at the time the proposal was considered in the Annual General Meeting.
In accordance with section 194 of the Companies Act, 1956, the minutes of the meeting signed by the Chairman of the said meeting in terms of section 193, shall be the evidence of the proceedings recorded therein. The objectors being the shareholders cannot now object to the shifting of the Registered Office. Accordingly, the objections raised by the Shareholders were liable to be rejected. The Company Law Board confirmed the alteration in the memorandum of Association of the Company to shift the Registered Office of the Company with the condition that the interest of no Employee is adversely affected.
12. Procedure for moving petition before the Company Law Board/Central Government
12.1. Petition to the Company Law Board/Central Government
The Petition in Form 1 shall be prepared as prescribed in CLB Regulations and presented to the Company Law Board/Central Government. The petition shall be in writing, typewritten or printed on one side of full-scale size paper in double space. (See Specimen of the Petition in Appendix 9) One copy of the petition u/s 17 shall be served on the concerned Registrar of Companies. In case of petition u/s 17 by a company licensed u/s 25 the copy of the petition shall also be served upon the Regional Director.
12.2. Serve a copy of petition to the concerned Registrar of Companies
A copy of the petition u/s 17 shall be served to the concerned Registrar of Companies and the acknowledgement of the Registrar shall be attached to the petition.
12.3. Requirement of an affidavit
The petition under section 17 shall be accompanied by an affidavit on non-judicial stamp paper of an appropriate value, duly verified before any Court Judge or person lawfully authorised to take and receive affidavits. (See section 558 of the Act and Rule 18 of Court Rules).
12.4. Publication of a notice on petition u/s 17
At least one month before presenting a petition u/s 17, the company is required to publish a general notice in a newspaper of the regional language of the State and in English in a daily English newspaper circulating in the State. The notice shall contain the substance of the petition and state that any person whose interest is likely to be affected by the proposed alteration of the Memorandum may intimate to the Company Law Board/Central Government, within 21 days of the publication of the notice, the nature of his interest to be affected by the said petition and the grounds of his opposition with a copy to the company at the registered office. (Appendix 10)
12.5. List of creditors and debenture holders
The petition under section 17 shall contain the number of creditors and the total amount due to them made up to a date within two months before filing the petition supported by an affidavit duly signed by the secretary of the company, if any, and not less than two directors, one of whom shall be the managing director, where there is one and shall file such affidavit to the effect that they have made a full enquiry into the affairs of the company and have formed the opinion that the list of creditors and debenture holders kept for inspection is correct, the debts or claims payable on a contingency as shown in the list are proper estimates of the values of such debts borne out by the books and records of the company and that there are no other debts of or claims against the company to their knowledge. The same shall also be made available at the registered office for inspection.
12.6. Documents to be attached to the petition
The documents that are to be attached to the petition have been enumerated as under:—
(a) Certified copy of the amended Memorandum and Articles of Association.
(b) Copy of the notice calling for the meeting with explanatory statement.
(c) Copy of the special resolution passed by the members of the company.
(d) Copy of the minutes of the meeting at which the special resolution was passed.
(e) Affidavit verifying the petition.
(f) Bank draft/Challan evidencing payment of fee.
(g) Memorandum of appearance with copy of the Board resolution or the executed vakalatnama, as the case may be.
(h) Copy of the latest audited balance sheet and profit & loss account of the company, auditors' and the directors' report.
(i) Certified copy of the Creditors' list.
(j) Affidavit proving dispatch and service of notice together with newspaper cuttings.
(k) Acknowledgement receipt from the Registrar of Companies/Regional Director.
12.7. Fees payable
The fees as per rules to be paid alongwith the petition. The fees payable under existing CLB Regulation is Rs. 1,000 which may be paid by means of a Bank draft drawn in favour of Pay and Accounts officer, Ministry of Company Affairs, New Delhi/Mumbai/Kolkatta/Chennai.
12.8. Consideration of interest of creditors before confirming petition
Before confirming the petition for alteration, the Company Law Board/Central Government is statutorily required to take into account the interest of creditors. The Company Law Board/Central Government will give due attention to objections received from any creditor. The Central Government also has the powers to direct that the consent of creditors should be obtained in writing or his debt or claim should be discharged.
12.9. Consideration of objections of the Registrar of Companies
The Company Law Board/Central Government shall give an opportunity to hear the Registrar of Companies in person and shall give full consideration of his views.
12.10 Serve notice to the Chief Secretary of the State Government or Union Territory
The company shall also serve a notice together with copy of the petition by registered post to the Chief Secretary of the State or Union Territory concerned and the views of the concerned Government authorities will be taken into account by the Company Law Board/Central Government.
12.11 Order of the Company Law Board/Central Government
After hearing the parties including the petitioner, the Company Law Board/Central Government shall take a final decision. The order under section 17 is discretionary and wide power is given to the Company Law Board/Central Government to decide the petition to confirm the alteration.
12.12 Filing of Order with the Registrar of Companies — Section 18
The company shall within three months from receiving the order (the time for obtaining copy of the order does not come within the period of three months, see section 640A), file with the Registrar of Companies in e-Form 21 alongwith the prescribed filing fees, the following documents:—
(i) Certified copy of the order of the Company Law Board/Central Government.
(ii) Printed and certified updated copy of the Memorandum as altered in the e-Form 62 electronically together with the adequate filing fee as prescribed under Schedule X of the Companies Act, 1956.
12.13 Certificate from the Registrar — Section 18
On filing of the order with the Registrar, it shall within one month from the date of filing of the documents, register the same and shall issue a certificate to that effect after registration of order. The certificate shall be conclusive evidence that all the requirements of the Companies Act, 1956 with respect to the alteration have been complied with.
12.14 Extension of time by the Central Government for filing of order with the Registrar
In case if the extension of time is sought for filing of order of the Company Law Board [Powers vested with the Central Government vide the Companies (Second Amendment) Act, 2002] with the Registrar beyond the period of three months, the company shall move the Company Law Board/Central Government before the expiry of three months as per section 18(1)(b).
In the case of Shivalik Steels & Alloys Pvt. Ltd. v Registrar of Companies in company petition No. 73-18(H)/91 — Company Law Board, dated 23-9-1991 case, an alteration was approved on 6-5-1986 but the company filed a certified copy of the order only on 1-10-1986. The company filed the other document only on 7-5-1987. At the instance of the Registrar, the company moved the CLB (now the Central Government) for extension of time. The CLB therefore, held that in view of the provisions of section 19(2) read with section 118(4) it was not possible to revive the order and the petition stood dismissed.
The power to grant extension of time can be exercised by the Company Law Board/Central Government only when the company makes an application either before the expiry of three months or before expiry of four months as per section 18 or 19 respectively.
In this connection the Department of Company Affairs vide its Circular No. 6616/31/4/78-Cl.V., dated 17-4-1978 conveyed the view that the filing of the order for shifting of registered office comes within the purview of section 18(3) which does not prescribe any time-limit. This view is on the basis that sub-section (3) of section 18 is independent of sections 18(1) and 18(4). However, this view does not take into account the provisions of section 19.