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Revision in the Procedure for Change in Registered Office

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Introduction:

The reasons and the procedure for changing the place of registered office of a company from one State to another are laid down in section 17 of the Companies Act, 1956 (the “Act“). The Ministry of Corporate Affairs (the “MCA“) has recently given the power under this section, which was earlier with the Company Law Board,  to the six Regional Directors sitting at Mumbai, Kolkata, Chennai, Noida, Ahmedabad and Hyderabad.

The Regional Directors overseea the functioning of the Registrars of Companies and the Official Liquidators working in their respective regions. They also have the task of liaisoning with the State and Central Governments.

The Changeover:

The MCA, vide notification S.O. 1539 (E) dated 10 July 2012 (the “Notification“) and brought into effect from 12 August 2012, has delegated the powers and functions under section 17 to the Regional Directors.

Process for the inter-state shifting of the registered office:

The ICSI has issued a check list in accordance with the Companies (Compliance Certificate) Rules, 2001 to effectuate the inter-state shifting of the registered office of a company. The following steps are prescribed (modified as per the Notification):

  1. The Board of directors to pass a resolution for change in the registered office of the company/alteration of the objects clause;
  2. The Board to call a general meeting and pass the necessary special resolution;
  3. A certified true copy of the special resolution along with the certified true copy of the explanatory statement to be electronically filed with the Registrar of Companies (the “ROC“) in e-Form No. 23 within thirty days from the passing of the resolution;
  4. A petition to be filed before the concerned Regional Director, for confirmation of the alteration of Memorandum relating to change of place of the Company’s registered office from one State to another;
  5. A certified true copy of the intimation from the Regional Director confirming the alteration of Memorandum in respect of the registered office of the Company together with the printed copy of the copy of the Memorandum as altered to be electronically filed with the ROC of each state;
  6. The ROC of each State to register the same an issue the Certificate of registration under his hand;
  7. Every copy of the Memorandum issued after the date of alteration to be in accordance with the alteration.

Analysis:

The Notification has the effect of enabling the Companies (Second Amendment) Act, 2002 which was kept in suspended animation for a very long time. There has been a transfer of power from the Company Law Board, an independent quasi-judicial body, to the Regional Directors, an administrative authority under the control of the MCA. The CLB procedure was time consuming and cumbersome and it is expected that the procedure will now be infinitely less cumbersome.

Bhushan Jatania. bhushan.jatania@pxvlaw.com

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