To tap into potential markets, companies may need to relocate their registered office strategically. They have the flexibility to change the registered office as needed, whether within local limits, between districts, from one Registrar of Companies (ROC) to another, or even from one state to another. This involves essential steps such as board and, if necessary, shareholder approval, filing relevant forms, advertising the change, verifying the new address, and ensuring compliance with statutory requirements for seamless adaptation to market dynamics.
Effortlessly relocate your company's office within the same city, town, or village, ensuring a smooth transition without changing the local jurisdiction.
Shifting your registered office beyond the current local limits but within the same state, maintaining continuity under the oversight of the same Registrar of Companies.
Shift your registered office between Registrars within the same state, simplifying the process while adapting to new administrative oversight.
Relocating your registered office from one state to another, navigating the necessary steps for a successful transition across state borders.
Calling a Board Meeting: As per Section 173(3) of the Companies Act, 2013, provide a seven-day notice for a Board of Directors meeting to pass a resolution on changing the registered office location within the same city, town, or village. Following Section 12(4), the company must inform the change of the registered office within fifteen days using the prescribed form. Ensure compliance by promptly notifying the alteration in the registered office location as mandated by the regulatory framework.
Convene a Board Meeting: In accordance with Section 173(3) of the Companies Act, 2013, issue a seven-day notice for a Board of Directors meeting. Seek preliminary approval from the Directors for relocating the company's registered office within the same state under the same ROC jurisdiction. Set the agenda to finalize the date, time, and venue for the General Meeting. Additionally, draft the notice and explanatory statement for the upcoming meeting to ensure transparency and compliance with legal requirements.
Holding EGM: Under Section 12(5)(a) of the Companies Act, 2013, enact a special resolution to approve the relocation of the registered office. Complete the process by filing the requisite forms with the Registrar of Companies (ROC). Ensure compliance with legal procedures for a smooth and officially sanctioned shift of the company's registered office.
Convene a Board Meeting: Section 173(3) of the Companies Act, 2013 requires a seven-day notice to convene a Board of Directors meeting to seek their approval for changing the registered office of a company within the same state, moving from one Registrar of Companies (ROC) jurisdiction to another. The meeting aims to fix the date, time, and place for a General Meeting and to draft the notice and explanatory statement.
Following board approval, a General Meeting is convened, and upon shareholder approval for the office shift, a resolution is passed. This resolution must be filed through the respective e-form with the ROC.
Within one week of filing the resolution, a notice detailing the office shift must be published in at least one daily newspaper and one English newspaper where the registered office is located. An application seeking approval is then made to the Regional Director, attaching the newspaper notice, at least 30 days before filing the application with the Regional Director.
After Regional Director Approval, the company must inform the ROC using the prescribed form. The relevant form for shifting the registered office is then filed with the concerned ROC. This comprehensive process ensures legal compliance and transparency in changing the registered office location within the same state.
According to Section 13(4) of the Companies Act, 2013, relocating a company's registered office from one state to another requires approval from the Regional Director.
To initiate this process, the Board of Directors must pass a resolution approving the shift and authorizing one or more Directors to take necessary actions. A General Meeting is then convened to seek shareholders' approval for the office relocation. The resolution passed in this meeting needs to be filed with the Registrar.
Within one week of filing the resolution, a notice detailing the office shift must be published in at least one daily newspaper and one English newspaper where the current registered office is situated. An application, along with necessary documents, is then submitted to the Regional Director for approval of the relocation.
It's important to note that relocation won't be allowed if the company is facing prosecution or under any inquiry. Upon receiving approval from the Regional Director, the company files the approval copy with the Registrar of Companies (ROC) and submits the relevant form for changing the registered office's state with the ROC. This meticulous process ensures legal compliance and transparency when relocating a company's registered office from one state to another.
The company's Memorandum of Association acts as its charter, outlining its scope and activities. Modifying the company's objectives necessitates amending the Memorandum. According to Section 13 of the Companies Act, 2013, this alteration can be achieved through a resolution passed by the company.
Convene a Board Meeting: A notice must be provided seven days in advance to convene a Board meeting. This meeting aims to obtain the initial approval of directors for changing the company's objectives. It also involves setting the date, time, and location for a General Meeting and preparing the corresponding Notice and explanatory statement.
Holding of General Meeting: To enact the required Special Resolution per Section 13 of the Companies Act, 2013, for altering the company's object clause, we, as expert company law advisors, will guide you through the process. Following shareholder approval, we will handle the filing of essential documents and forms, ensuring compliance with Registrar of Companies standards.
Changing a company's name requires amending its Memorandum of Association through a resolution, as per Section 13 of the Companies Act, 2013.
The company can alter its name by special resolution, pending approval from the Registrar of Companies and the Central Government.
For this change, the company must not accept deposits and should not default in filing Annual Returns with the Registrar of Companies. Compliance with these conditions is crucial for a smooth name change process.
Board Meeting and Filing of Name: We assist you in preparing the Board meeting Notice. It must be sent to all directors at least 7 days before the meeting, where the resolution is passed to finalize names and authorize a director to apply to the ROC..
Next, we apply for name availability with the Registrar of Companies. Following this, a General Meeting is called with a minimum 21 days' notice, accompanied by an explanatory statement.
Upon approval in the General Meeting, the Resolution, along with the redrafted Memorandum of Association (MOA) and Articles of Association (AOA), is filed with the ROC. After obtaining approval, the respective form is filed to officially implement the name change.
A company has the flexibility to increase its share capital as needed. This increase in authorized capital is achieved by passing an Ordinary resolution and paying the necessary stamp duty to the government.
Typically, Nominal Capital or authorized capital represents the maximum capital amount a company can distribute among its shareholders and members. Many companies initially register a small authorized capital. However, as the company grows and in response to requests from investors, lenders, or customers, there may be a need to increase the authorized capital.Increasing the authorized capital involves making changes to the Memorandum of Association, Articles of Association (which initially detail the capital amount), and other relevant documents. This process ensures alignment with the company's evolving needs and external demands.
Steps:
This designated form is provided for converting a company's new capital share. It not only facilitates the conversion of capital shares but also handles the conversion of debentures and loans within a 30-day timeframe. Subsequently, these changes can be electronically updated on the Ministry of Corporate Affairs portal.
Under the legal framework, registered companies have the authority to issue shares based on specific criteria. Private Limited Companies have options such as "rights issue," "private placement," and "bonus issue." Public Limited Companies, on the other hand, exclusively issue shares through a "public issue."
Increasing paid-up capital is achieved through a Board Resolution following the receipt of the subscription amount from subscribers. The augmentation of paid-up capital must occur within 60 days from the date of receiving the subscription amount.
This process ensures that the company remains compliant with regulations and effectively manages its capital structure. Adhering to these timelines is crucial for maintaining transparency and legal conformity in the increase of paid-up capital.
Private placement, as per Sections 62(1)(c) and 42 of the Companies Act, 2013, involves a company offering securities to a specific group of individuals, distinct from a public offering.
This is executed through a private placement offer cum application, complying with the conditions specified in the Companies Act, 2013.
The private placement is restricted to a select group, termed "identified persons," as identified by the Board, with their number not exceeding fifty or a higher count as prescribed by the Central Government.
Companies utilizing this section are prohibited from engaging in public advertisements or using media, marketing, or distribution channels to inform the broader public about the issue.
Additionally, no new offer can be made unless previous allotments are completed or the earlier offer is withdrawn or abandoned by the company. These regulations ensure a controlled and targeted approach to private placement, emphasizing discretion and adherence to legal guidelines.
Shares issued on a Right Basis refer to the offering of additional shares to existing equity shareholders of the company. This offer is made in proportion to their current holdings' paid-up share capital, sent through an offer letter.
The issuance process involves a 15-day notice, not exceeding 30 days, to existing shareholders. If the offer is not accepted within this timeframe, it is deemed to be declined. Unless specified otherwise in the company's articles, the offer includes the right for the individual to renounce the offered shares in favour of another person. This method ensures a fair and proportional distribution of shares among existing shareholders, allowing them the opportunity to maintain their ownership in the company.
The steps to allotment of shares are as follows:
When a legal representative of a deceased member transfers shares, it's deemed a transmission of shares by operation of law. The company registers this transmission in the Register of Members. This process acknowledges the change in ownership due to the passing of a shareholder.
When shares are transferred due to legal reasons like inheritance, there's no need for a transfer deed. Instead, a legal representative can submit a simple application to the company along with necessary documents such as, a. Certified copy of death certificate; b. Succession certificate; c. Probate; d. Specimen signature of the successor.
This process is known as transmission of shares by operation of law. However, for regular transfers of shares from one member to another, a transfer deed in FORM NO SH 4 is mandatory as per section 56. The company cannot register the transfer without this proper application.
Sweat Equity shares, the issuance of shares to employees, is a way for companies to reward their staff or directors. These shares are provided at a discount or for considerations other than cash, acknowledging contributions such as intellectual property rights or value additions.
The rights, limitations, and provisions applicable to equity shares also apply to sweat equity shares, ensuring parity with other equity shareholders.
To issue Sweat Equity shares, a Special Resolution is passed in a General Body meeting, and approval can be obtained through a Postal Ballot approved by the Board meeting. This process aligns with company governance standards while recognizing and rewarding valuable contributions from employees and directors.
A company has the option to issue fully paid-up bonus shares from Free Reserves, Securities Premium account, or Capital Redemption Reserve account.
However, issuing bonus shares cannot involve capitalizing reserves through asset revaluation and should not substitute for dividend payments.
Conditions for issuing bonus shares include ensuring the company has not defaulted on fixed deposit or debt securities payments, met statutory employee dues, and possesses no partly paid-up shares.
Authorization for bonus shares must be present in the company's Articles; if not, the Articles need updating. Bonus shares are then issued through approval in a General Meeting, aligning with legal requirements and maintaining transparency in the distribution of bonus shares to company members.
A company has the option to issue debentures with a conversion option at the time of redemption, either wholly or partially. However, debentures with voting rights cannot be issued. The issuance of convertible debentures requires approval through a special resolution at a general meeting. No such approval is needed for non-convertible debentures.
For secured debentures, a company must adhere to terms and conditions prescribed by the central government, and the redemption date should not exceed ten years from the issue date. When a company issues non-convertible or partially convertible debentures, it must create a Debenture Redemption reserve from its profits..
The issuance of debentures requires approval through a General Meeting, and a special resolution can be passed through the postal ballot process if the number of members exceeds two hundred, ensuring compliance and transparency in the issuance process.
To thrive as a successful promoter and establish a robust business, having substantial funds to safeguard, construct, expand, and develop products is crucial. Meeting diverse business requirements demands significant investments, often necessitating loans or credits from banks and financial institutions. It's imperative for companies availing loan facilities to register the loan amount through the creation of charges, accompanied by necessary documents, with the Registrar of Companies. Similarly, when the company repays the loans, it must inform the Registrar of Companies by completing the satisfaction of charges process, ensuring transparent financial reporting and legal compliance.
Calling a board meeting: As per section 173(3) of the companies Act, 2013 issue a notice for convene a board meeting.
Hold a Board Meeting: The primary objective of the meeting is to secure preliminary approval from the Board of Directors for a conversion and to amend the articles of association, pending approval from the Central Government. Additionally, the meeting aims to set a date and time for an Extraordinary General Meeting to seek shareholders' approval. It involves drafting, approving, and issuing a Notice along with an explanatory statement, adhering to the guidelines outlined in Section 102(1) of the Companies Act, 2013. This process ensures transparency and legal compliance in making significant alterations.
Hold a Extra ordinary General Meeting: Conduct an Extraordinary General Meeting (EGM) on the scheduled date to secure shareholder approval for converting from a public limited to a private limited company, accompanied by alterations to the Articles of Association as per Section 14. Following the EGM, the company must submit various e-forms at different stages to the Registrar of Companies. Post-conversion, additional formalities include notifying relevant authorities such as Sales Tax, Excise, updating PAN details, and updating bank records. This comprehensive process ensures legal compliance and smooth transition in company status.
According to Sections 14 and 18 of the Companies Act 2013, an existing private company can undergo conversion into a public limited company following specific procedures outlined in the legislation.
Convene a board meeting: In accordance with Section 173(3) of the Companies Act, 2013, a notice must be issued to convene a board meeting, allowing at least 7 days for preparation. The primary objective of this meeting is to seek the preliminary approval of the Board of Directors for the conversion process and to amend the articles of association, pending approval from the Registrar of Companies. Additionally, the meeting aims to set the date and time for the General Meeting to obtain shareholder approval, and to draft, approve, and issue the Notice, including an explanatory statement as required by Section 102(1) of the Companies Act, 2013.
Hold a Extra ordinary General Meeting Following the EGM held on the scheduled date mentioned in the Notice, shareholders' approval is sought for the conversion of a public limited company to a private limited one, alongside the alteration of Articles of Association under Section 14.
Subsequently, the company is required to file various e-forms with the Registrar of Companies at different stages post-EGM. Additionally, there are post-conversion formalities, such as notifying relevant authorities like Sales Tax, Excise, and updating records such as PAN and bank details. Whether transitioning from a public to a private limited company or vice versa, an application must be submitted by the company in the requisite form to the Registrar of Companies in accordance with Rule 33 of the Companies (Incorporation) Rules, 2014.
Whether converting from public to private or private to public, the company must submit an application for the conversion in the required form to the Registrar of Companies. This process is in accordance with Rule 33 of the Companies (Incorporation) Rules, 2014.
There are two types of conversions ie Voluntary conversion of OPC to Private/Public limited and compulsory conversion of OPC to Private/Public limited
Voluntary conversion of OPC to Private Limited or Public Limited:
Under the Companies Act, 2013, an OPC (One Person Company) cannot switch voluntarily to a Private Company before two years from its incorporation date.
However, after this initial period, an OPC can apply to convert to a Private or Public Limited Company by submitting the necessary documents to the Registrar of Companies, following Section 18 and Rule 7(4) of the Companies Act, 2013.
Compulsory Conversion of OPC to Private / Public Limited and Vice Versa:
According to Rule 7(4) of the Companies (Incorporation) Rules, 2014, if a One Person Company (OPC) has a paid-up capital of Rs. 50 lakhs or more, or an annual turnover exceeding Rs. 2 crore, it must convert to a Private Limited Company or Public Limited Company. Section 173(3) mandates calling a board meeting to approve the conversion.
The conversion process involves passing a special resolution in an Extraordinary General Meeting, although in the case of an OPC with only one member, this member can record the decision in the meeting minutes with their signature, which suffices as a special resolution. Following this, the company must file the requisite e-forms as per the Companies Act, 2013, to effect the conversion.
1. Procedure for appointment of auditors by companies & Reappointment.
Except for government companies, the initial auditor of a company is appointed by the board of directors. This appointment must occur within 30 days of incorporation, lasting until the first annual general meeting. In case of failure to appoint within the initial 30 days, the period can be extended up to 90 days.
Procedure to appoint an auditor:
Re-appointment of the Auditor:
Typically, a company may reappoint the same auditor after a 5-year period if certain conditions are met.
2. Procedure for removal of director by company
The authority to remove a director in a company lies with the shareholders, who can take this decision at any time before the completion of the director's tenure. Typically, shareholders can pass an ordinary resolution during their meeting to effect the removal. This power is not limited by the formal documents such as the Memorandum of Association (MOA), Articles of Association (AOA), or any other agreement governing the company.
Chances of removing a director:
Procedure of removal of a director:
ROC filing process:
Appointment of Casual vacancy for Director Position:
3. Procedure for appointment and resignation of director.
Each company is permitted to appoint individuals as directors. Private Limited Companies must have a minimum of 2 directors, while Public Limited Companies require at least 3 directors. It is mandatory for a One Person Company to have a single individual as the director. The maximum number of directors allowed is 15, and any increase beyond this limit requires the company to pass a special resolution during their general meeting. This ensures a regulated and efficient governance structure for companies.
Procedure of appointment:
Resignation of a director: