Private company - virtual office

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Anil (Querist)
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26 August 2014 A private company is planed to be set up which will own a website. The content for the website will come from various consultants working at many places. As such the private company does not need an physical office.

Does the new companies Act 2013 anywhere has special provisions for such companies which do not need physical office ?

The practical problem is:

1) Residence of Director cannot be given as registered office as it is not a commercial place

2) The company does not want to have physical commercial office because company does not need it and it will be a waste of money if it rents/ buys a commercial place for office

How can one resolve this in cost effective legal way?

CA Kedar Sakhardande

CA Kedar Sakhardande (Expert)
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26 August 2014 Hello

Virtual office is not allowed as such. There has to be a physical office.

It is not necessary that Reagistered office has to be a commercial place only, it can be a residential place as well.

Regards

Anil

Anil (Querist)
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26 August 2014 Thanks for your reply sir.

1) If pyhysical office has to be there, - the law is forcing the company to have a office which it does not need. It does not seem fair.

2) Eventhough registered office can be there in residential place, while forming the company the owner of the residence has to give a declaration that he has no objection to running the company from his residence. Many residential owners who have let out the place for residential place are reluctant to give such declaration for obvious reasons. Owning a website and earning income out of it is commercial activity. The shop and establishmennt Act expects the address given to it to be a commercial place and not residencial place. One cannot give residential address under companies Act and another commercial place address under shop and establishmment act.

Your views on this are appreciated.

CA Kedar Sakhardande

CA Kedar Sakhardande (Expert)
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26 August 2014 1)The Act required company to have a physical office. There is no discretion provided to promoters to decide whether they really need it or not.

Please see Companies Act 2013

THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
12. (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.
(3) Every company shall—
(a) paint or affix its name, and the address of its registered office, and keep the
same painted or affixed, on the outside of every office or place in which its business is
carried on, in a conspicuous position, in legible letters, and if the characters employed
therefor are not those of the language or of one of the languages in general use in that
locality, also in the characters of that language or of one of those languages;
(b) have its name engraved in legible characters on its seal;
(c) get its name, address of its registered office and the Corporate Identity
Number along with telephone number, fax number, if any, e-mail and website addresses,
if any, printed in all its business letters, billheads, letter papers and in all its notices and
other official publications; and
(d) have its name printed on hundies, promissory notes, bills of exchange and
such other documents as may be prescribed:
Provided that where a company has change it

Thus the company registered office is necessary to decide jurisdiction of ROC, Police station, Tax Authorities etc.

2) Yes NOC is required obviously to register company at residential place. So do for other tax registrations

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Anil

Anil (Querist)
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26 August 2014 1) Point 1 of your reply says
Within 15 days of incorporation the company must have a registered office. But before company incorporation at registration time itself one informs the address of registered office. Should one inform registrar again within 15 days of registration regarding company's registered office? IF yes, which form to use for reporting?

2)Second point says within 30 days of incorporation the company has to furnish to registrar verification of registered office. What is verification of registered office ? who does the verification? Which form to use for reporting regarding verification?

CA Kedar Sakhardande

CA Kedar Sakhardande (Expert)
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31 August 2014 1) You should use Form INC-22. No need to inform again. You will file the form at the time of incorporation itself (Incorporation with Regd Office)

2) The ROC may physically inspect the office if required. No seperate form is to be filed

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