Does Change of Registered Office Require Shareholder Approval?

Registered office is an integral part of a business, does change of registered office require shareholder approval? learn now

A company’s registered office is the location where all correspondence and notices are sent. Section 12 of the Companies Act 2013,  requires all companies to establish a registered office Shareholder Approval either at the time of incorporation or within 30 days. The state in which the company’s registered office is located is specified in the circumstance clause of the Memorandum of Association. However, the Registrar of Companies must receive a notification of precise address in form INC-22. Any change in the registered office’s condition must be reported to the Registrar of Companies in e-Form INC- 22 within 30 days, together with the applicable costs.

Shareholders of a Company

Shareholder Approval get to elect the board of directors to help run the company and typically vote on this at the annual shareholder meeting. A company acts through two bodies of people – its shareholders and its board of directors. A shareholder, commonly referred to as a stockholder, is any individual, company, or institution that owns at least one share of a company’s stock. 

Shareholder’s Approval in Change of Registered Office Address of the Company

Although the companies act directly and expressly does not provide any provision that mandates shareholder’s approval in case of change of its registered business, there are indirect powers and rights enjoyed by the shareholders that lead to their approval being more or less significant in such situations. Shareholder agreement have the right to call a general meeting. They have a right to direct the director of a company to call extraordinary general meeting. 

A single shareholder holding a minimum of 10% of the company’s paid-up share capital can challenge a resolution adopted by a general meeting on the grounds of oppression or mismanagement. Such a challenge can be brought about by filing a petition before the National Company Law Tribunal. A single shareholder, irrespective of his shareholding in the company, can also bring a derivative suit challenging a resolution adopted by a general meeting, on behalf of the company, if that resolution was detrimental to the interest of the company. 

Most importantly, Shareholder Approval elect directors during annual general meetings; these directors constitute a board that is charged with the responsibility for the overall management of the company. They can also remove the directors of the company. 

Procedure for Shifting of Registered Office from Jurisdiction of One Registrar of Companies to Another Within the Same State

1. Convene a board meeting and to decide on: calling of Extraordinary General Meeting, and authorizing Company Secretary or any director for moving an application to Regional Director in form INC-23 and other miscellaneous compliance required in this behalf.
2. Issue notice of EGM along with clear agenda of business, draft resolution for shifting of registered office
3. Hold the extra ordinary general meeting on appointed date and time and obtain approval of members by passing a special resolution for shifting of registered office
4. File form MGT – 14 within 30 days of passing of special resolution along with notice of EGM, Certified True Copy of special resolution with explanatory statement annexed thereto. File an application for seeking confirmation from the Regional Director in e- form INC-23 along with prescribed fee [Section 12(5) R/w Rule 25 Chapter 2]
5. Passing of the board and special resolutions.
6. A declarations to be given :

• i) by the Key Managerial Personnel or any two directors authorised by the Board, about the sound financial status of the company;
• ii) a declaration not to seek change in the jurisdiction of the court where cases for prosecution are pending

1. Acknowledged copy of intimation to the Chief Secretary of the state as to the proposed shifting and that the employees interest is not adversely affected consequent to proposed shifting.
2. Obtain a confirmation order from regional director and file same with ROC in form INC-28 along with the prescribed fees within 60 days from the date of order 
3. Notify Registrar in e-form INC – 22 within 30 days from the receipt of confirmation order of Regional Director along with prescribed fees and accompanied by following documents [Section 12(4)]:

• -the registered document of the title of the premises of the registered office
• -the notarised copy of lease or rent agreement
• -the authorisation from the owner or authorised occupant of the premises

1. Get the new address of registered office printed on all company’s business letters, bill heads, letter papers, notices and other official publications (Section 12).

Procedure for Shifting of Registered Office from One State to Another

This process of shifting from one state to another is same as above except in certain point where some extra compliance is required, such as:

1. The Company shall, not more than thirty days before the date of filing the application in Form No. INC.23 – 

• Publish an advertise in Form No. INC-26 in the vernacular newspaper in the vernacular language in the district and in the English language in a famous English newspaper:
• serve, by registered post with acknowledgment due, individual notice on each debenture-holder and creditor of the company; 
• and serve, by registered post with acknowledgment due, a notice and copy of the application to the Registrar and to the SEBI, in the case of listed companies 

1. File an application for seeking confirmation from the Regional Director (under whose jurisdiction existing registered office of the company is situated) in e- form INC-23 along with prescribed fee, accompanied by, inter alia, a list of creditors and debenture holders, drawn up to the latest practicable date preceding the date of filing of application by not more than one month. If you have any queries reach out to our experts on vakilsearch

Click Here: Change in Registered Office of Company

Conclusion

Thus we can say that shareholder’s approval is quite significant to a company’s change of address as in any case, their approval will be obtained in the special resolutions or if they are not happy with the board’s decision they can take certain steps to challenge it or even reconstitute the board. The board of directors and the Shareholder Approval of a company have to work together to make the company run effectively.

Read More,

• Shifting of Registered Office of the Company
• Change in Registered Office of Company Within Local Limits
• Change in Registered Office of Company Within State