Section 11: Companies Act- Incorporating companies and compliances in India
Section 11 of the Companies Act, 2013 deals with the requirement of a company to have a registered office in India. It states that:
"(1) A company shall, on and from the fifteenth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.
(2) The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed."
The section further provides that if a company changes its registered office from one place to another within the same state, it shall give notice of the change to the Registrar within fifteen days of the change. If the company changes its registered office from one state to another, it shall pass a special resolution and get the approval of the Company Law Board.
There have been several cases where the provisions of Section 11 have been interpreted by the courts. Some of the important ones are:
In the case of Re Madura Coats Ltd. (1995), the Madras High Court held that the registered office of a company is a place where the company maintains its statutory books and records and where notices and other legal documents can be served. The court further held that the registered office need not be the place where the company carries out its business activities.
In the case of Juggilal Kamlapat vs CIT (1969), the Supreme Court held that the registered office of a company is its official address and the company must keep its statutory registers and books at the registered office. The court further held that the registered office need not be the place where the company carries out its business activities.
In the case of Union of India vs R.K. Gandhi (2010), the Delhi High Court held that the registered office of a company is the place where the company maintains its statutory books and registers, and where notices and other legal documents can be served. The court further held that the registered office need not be the place where the company carries out its business activities.
Rule 25 of the Companies (Incorporation) Rules, 2014 provides the manner of verification of the registered office of the company. The rule states that the company shall file with the Registrar a verification of its registered office in Form INC-22 within thirty days of its incorporation. The rule further provides that if the company changes its registered office, it shall file Form INC-22 within fifteen days of the change.
In the case of AIA Engineering Ltd vs Addl CIT (2018), the Bombay High Court held that the registered office of a company is a place where the company maintains its statutory books and records and where notices and other legal documents can be served. The court further held that the registered office must be a physical location and not a post office box or a mail forwarding service.
In the case of Union of India vs Ahuja Radios (India) Ltd (1986), the Delhi High Court held that the registered office of a company is the place where the company maintains its statutory books and registers, and where notices and other legal documents can be served. The court further held that the registered office need not be the place where the company carries out its business activities.
In the case of In Re: Satyam Computer Services Ltd (2010), the Company Law Board held that the registered office of a company is the place where the company maintains its statutory books and records and where notices and other legal documents can be served. The board further held that the registered office must be a physical location and not a virtual office.
In the case of Innoventive Industries Ltd vs ICICI Bank (2017), the Supreme Court held that the registered office of a company is the place where the company maintains its statutory books and records and where notices and other legal documents can be served. The court further held that the location of the registered office is crucial for determining the jurisdiction of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
Rule 27 of the Companies (Incorporation) Rules, 2014 provides that a company must paint or affix its name and address of the registered office outside every office or place where it carries on business. The rule further provides that if a company has more than one place of business, it must paint or affix its name and address at every such place.
In the case of In Re: Veerabhadrayya Hiremath (2017), the National Company Law Tribunal held that if a company fails to maintain its registered office, it can be struck off the register of companies. The tribunal further held that if a company provides a false address as its registered office, it can be penalized and its directors can be held liable.
In summary, Section 11 of the Companies Act, 2013 requires every company to have a registered office in India and maintain its statutory books and records at that office. The provision is crucial for determining the jurisdiction of the NCLT and the NCLAT. The various cases and rules discussed above provide a better understanding of the interpretation and implementation of this section, including the consequences of failing to comply with the provisions of this section.
By Siddharth Dalmia
The StartUp Sherpa
+91-9971799250
dalmiasiddharth1994@gmail.com
