What is a Registered Office?
When a company is incorporated, it must declare a registered office. This is the official address of the company, where all communications and notices from the government, regulators, banks, and other stakeholders are sent. The registered office can be different from the place where the company’s actual business activities happen.
The registered office is important because:
- It proves the legal existence of the company.
- It is used for official correspondence with government authorities like the Ministry of Corporate Affairs (MCA), Registrar of Companies (ROC), Income Tax Department, and others.
- Statutory records and registers of the company are usually kept at the registered office.
- It helps authorities and other stakeholders know where to send important notices.
Why is it Mandatory to Maintain a Registered Office?
The Companies Act, 2013, requires every company registered in India to maintain a registered office at all times. According to Section 12 of the Act:
- A company must have a registered office from the 15th day of incorporation.
- The office address must be capable of receiving and acknowledging all relevant communications and notices addressed to the company.
This ensures the key elements like transparency, accountability and smooth communication between the company, government, and public.
Requirements Related to Registered Office
Here are some key requirements under the Companies Act, 2013:
- Display of Name and Address: The company must paint or affix its name and registered office address outside the office premises in a visible manner, in the local language and in English.
- Letterheads and Official Documents: The company must print its name, registered office address, Corporate Identification Number (CIN), telephone number, email ID, and website (if any) on all business letters, billheads, letter papers, notices, and other official publications.
- Change of Registered Office: If a company wants to change or alter its registered office address, it must follow the prescribed procedure provided under the Companies Act, which includes filing the required forms with the ROC within the specified time limits as provided.
- Intimation of Change: The company must inform the ROC of any change in the situation of the registered office by filing Form INC-22 within 30 days of the change.
- Verification of Registered Office: As per Rule 25 of the Companies (Incorporation) Rules, 2014, the company must provide proof of ownership or rent/lease agreement, utility bills, and a NOC from the owner to verify the registered office address.
Penalty for Not Maintaining a Registered Office
If a company fails to maintain a registered office as per Section 12, it attracts penalties under the Companies Act. These penalties can affect both the company and its officers in default.
1. Penalty Under Section 12(8)
- If the company does not maintain a registered office capable of receiving and acknowledging communications and notices, it is liable to a penalty of ₹1,000 per day during which the default continues.
- The maximum penalty is ₹1,00,000.
2. Penalty on Officers
- Every officer of the company who is in default (directors, key managerial personnel, etc.) is also liable to a penalty of ₹1,000 per day of default, up to a maximum of ₹1,00,000.
3. Strike Off of Company
- If the Registrar of Companies has reasonable cause to believe that the company is not carrying on any business or operations and the registered office is not maintained properly, the ROC can initiate action for striking off the company’s name from the register of companies under Section 248 of the Act.
4. Other Consequences
- Not maintaining a registered office can lead to important notices from authorities not being received by the company, which may result in missed deadlines, legal proceedings, or other regulatory actions.
- Banks and investors may lose trust in the company if the registered office is not properly maintained.
Examples of Non-Compliance
To understand this better, here are two simple examples:
Example 1:
ABC Pvt Ltd. was incorporated on January 1, 2023. As per the law, it is required to have a registered office as of January 15, 2023. However, ABC Pvt Ltd. did not establish any registered office. The ROC issued notices to the company, but they were returned undelivered or unopened. Upon inspection by authorities, the ROC found that the company did not maintain a registered office.
- The company is liable to pay ₹1,000 per day of delay from January 15, 2023, until the registered office is established or up to a maximum of ₹1,00,000.
- Directors and officers of the company are individually liable to pay the same penalty.
Example 2:
XYZ Ltd. shifted its office from Mumbai to Pune but did not file Form INC-22 to intimate the ROC within 30 days of the change. The ROC discovered this during an inspection.
- The company and its officers are liable for penalties because they failed to comply with the legal requirement of timely intimation of a change in the registered office.
How to Avoid Penalties?
To avoid these penalties, companies should:
- Ensure the registered office is set up within 15 days of incorporation.
- Keep the office active and capable of receiving communications at all times.
- Display the name and address outside the registered office as per legal requirements.
- File the necessary forms (like INC-22) within the prescribed time limits whenever there is a change in the registered office address.
- Maintain updated statutory records and registers at the registered office or as permitted by law.
- Respond to any notice or communication received at the registered office promptly.
Important Forms Related to Registered Office
Some key forms under the Companies Act for registered office compliance are:
- INC-22: Filed for intimation or change of the registered office.
- INC-20A: Declaration for commencement of business, which requires verification of the registered office.
- INC-23: Filed for shifting registered office from one state to another.
Conclusion
Maintaining a registered office is not just a legal formality, but an essential element for running a company in India. It ensures that the company can be reached by government authorities, creditors, customers and other stakeholders. The company’s registered office serves as the official address for all legal and regulatory communications. Failure to maintain a registered office may lead to significant penalties on both the company and its officers, including monetary fines of up to ₹1,00,000, and in extreme cases, the risk of the company being struck off by the Registrar of Companies.
Therefore, every company must take the requirement of maintaining a registered office very seriously and ensure timely compliance with all provisions as provided under the Companies Act, 2013. Keeping the registered office active, updated and compliant not only helps avoid penalties but also builds credibility and trust with stakeholders, regulators, and the public.
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