Companies Act Section 12

Companies Act Section 12: Registered Office of a Company

Introduction

Section 12 of the Companies Act mandates that every company must establish and maintain a registered office within a specified period after its incorporation. 

The registered office serves as the company’s official address for receiving communications, legal notices, and other correspondences. 

It is crucial for the smooth operation of the company, as this address will be used for any formal dealings with the government, stakeholders, and other entities. 

The section also outlines specific rules regarding the display of the company’s name and address, the procedure for changing the registered office, and penalties for non-compliance.

1. Requirement for a Registered Office

From the moment a company is incorporated, it has 30 days to establish and maintain its registered office. 

This office plays a vital role, as it is where all official communications and notices to the company will be addressed.

Initial Setup: 

The company must ensure that its registered office is fully operational within this 30-day timeframe after incorporation. 

This means that the office should be in a position to receive and acknowledge any communications sent to it.

Continuous Maintenance: 

Beyond the initial setup, the company is required to maintain this registered office on an ongoing basis. 

It must remain functional throughout the company's existence, and it should be capable of receiving official communications at all times.

2. Verification of the Registered Office

In addition to setting up the registered office, the company is also required to submit verification of the office’s existence to the Registrar of Companies (RoC) within the same 30-day period from the date of incorporation.

Verification Process: 

The verification must be done in the prescribed manner, meaning that the company must follow the specific procedures and formats outlined by the regulatory authorities. 

This ensures that the registered office is not just a nominal address, but an actual, functioning office for company operations.

3. Display of Company's Name and Registered Office Address

To ensure transparency and clarity regarding the company’s location, the Act sets forth strict guidelines about the display of the company’s name and registered office address. 

These guidelines help the public and authorities easily identify the company’s official premises.

(a) Office Display Requirements

The company must prominently display its name and the address of its registered office on the outside of every office or place where it conducts business. 

This display must be in legible letters, meaning it should be clearly visible and readable.

If the language or script used for the display is not prevalent in the locality, the company must also display this information in the local language or script. 

This ensures that people in the area can easily identify the company.

(b) Seal Requirements

If the company has a seal, its name must be engraved in legible characters on this seal. 

This is important because the seal is often used for official documents and legal agreements.

(c) Business Document Requirements

The company’s name, along with other important information, must be printed on all official business documents. 

This includes:

Business letters, billheads, letter papers, notices, and any other official publications. 

The following details must be included:

Name of the company.

Address of the registered office.

Corporate Identity Number (CIN).

Telephone number.

Fax number (if applicable).

Email address.

Website address (if applicable).

(d) Financial Instruments

The company’s name should also be printed on various financial documents, such as hundies, promissory notes, bills of exchange, and other prescribed documents. This ensures that any financial instruments issued by the company are easily identifiable.

(e) Former Names

If the company has changed its name in the last two years, it must include both the former name(s) and the current name on all documents mentioned in the previous clauses. This provides transparency regarding any recent name changes.

(f) One Person Company (OPC) Requirements

For a One Person Company, the words “One Person Company” must be mentioned in brackets below the company’s name wherever it is printed, affixed, or engraved. This helps identify the special status of the company.

4. Change of Registered Office: 

If the company needs to change the location of its registered office, it must follow a specific process outlined in the Act.

(a) Notice of Change

Any change in the situation of the registered office must be notified to the Registrar within 30 days of the change. The notice must be verified in the prescribed manner to ensure the new office is fully functional.

(b) Restrictions on Changing the Office Location

The company cannot move its registered office outside the local limits of the city, town, or village where it is currently located without passing a special resolution. The local limits are defined:

For existing companies, these limits are as they were at the commencement of the Act, or as they have been modified by a special resolution.

For newly incorporated companies, the local limits are those of the initial registered office or as modified by a special resolution.

(c) Registrar’s Jurisdiction

If a company wishes to change its registered office from the jurisdiction of one Registrar to another within the same state, it cannot do so without the confirmation of the Regional Director. The company must apply for this confirmation in the prescribed manner.

5. Confirmation and Registration of Change: 

Once the company has applied for a change of its registered office, several steps must be followed to ensure the process is completed properly.

(a) Regional Director Confirmation

The Regional Director is required to communicate the confirmation of the change within 30 days of receiving the application. Once the confirmation is granted, the company must file this confirmation with the Registrar.

(b) Filing with Registrar: After receiving the confirmation from the Regional Director, the company must file this confirmation with the Registrar within 60 days.

(c) Issuance of Certificate by Registrar: The Registrar will then register the change of the registered office and issue a certificate of registration within 30 days of receiving the confirmation. 

(d) Effectiveness of Certificate

The certificate issued by the Registrar serves as conclusive evidence that all the necessary legal requirements for changing the registered office have been met. The change of the registered office becomes effective from the date the certificate is issued.

6. Penalties for Non-Compliance: 

Failure to comply with the provisions of Section 12 can lead to penalties for both the company and its officers.

Penalty for the Company and Officers: If the company or any officer fails to comply with the requirements, they are liable to a penalty of one thousand rupees for each day the default continues, up to a maximum of one lakh rupees.

7. Registrar’s Authority for Physical Verification: 

If the Registrar has reasonable grounds to believe that a company is not conducting any business or operations, they may initiate a physical verification of the registered office.

Verification Process: This physical verification is done in the prescribed manner and allows the Registrar to ensure the company is in compliance with subsection (1), which mandates the establishment and maintenance of a registered office.  

Action for Non-Compliance: If non-compliance is found during the physical verification, the Registrar may initiate action to remove the company’s name from the register of companies under Chapter XVIII, in addition to imposing any penalties for the violation.