SECTION 17 OF COMPANIES ACT 1956 IF THERE ARE NO CREDITORS
This query is : Resolved
19 February 2010
Hi,
Please let me know, if there are no creditors in a company which is shifting its office from one state to another, does it have to annex list of creditors in the petition? if not then what it has to annex to that effect?
Please let me know, if there are no creditors in a company which is shifting its office from one state to another, does it have to annex list of creditors in the petition? if not then what it has to annex to that effect?
19 February 2010
A certificate from the statutory auditor stating that there are no creditors in the company and an Affidavit from the Directors stating the same.
06 March 2010
Can you please let me know the section in the companies act 1956 which says so, or any other law that says so.
06 March 2010
Is it enough to have a declaration from the diretor stating that there are no creditors or debentureholders in the letter head of the company instead of an affidavit from him.
23 July 2025
Section 17 of the Companies Act, 1956: Shifting of Registered Office from One State to Another
In the case of a company shifting its registered office from one state to another, there are specific requirements related to the petition and the documentation that needs to be submitted, especially if there are no creditors.
Here’s a breakdown of the process and the key requirements:
1. Requirement for List of Creditors
Under Section 17 of the Companies Act, 1956, when a company proposes to shift its registered office from one state to another, it must file a petition with the Company Law Board (CLB) (now the National Company Law Tribunal (NCLT) after the 2013 amendment).
If the company has creditors, a list of creditors must be annexed to the petition. However, if there are no creditors in the company, the company is not required to annex the list of creditors.
2. Documentation When There Are No Creditors
If there are no creditors (including debenture holders) in the company, the company is still required to provide certain documentation to support this claim.
Typically, the documents to be annexed include:
A certificate from the statutory auditor stating that there are no creditors in the company.
An affidavit from the directors confirming that the company has no creditors.
While some practitioners may use a declaration from the director on the company's letterhead instead of an affidavit, the affidavit is generally considered more formal and legally binding.
3. Legal Basis and Practice
The Companies Act does not specifically mention the exact documentation to be annexed when there are no creditors in the context of shifting the registered office. However, these are standard practices that have been followed and accepted by the Company Law Board (CLB) and are now adhered to by the National Company Law Tribunal (NCLT).
Section 17 does not provide the specific format of the documents, but it is accepted that a certificate from the statutory auditor and an affidavit from the directors will suffice.
This practice is followed to ensure that the company’s claim of having no creditors is legally substantiated and can be validated.
4. Affidavit vs. Declaration from the Director
While a declaration on the letterhead from the directors stating that there are no creditors might be acceptable in informal settings, an affidavit carries more weight legally, as it is sworn under oath. The affidavit would make it a formal, legally binding declaration that the company has no creditors or debenture holders.
5. Best Practice
Affidavit from Directors: It is recommended to provide an affidavit from the directors affirming that the company has no creditors or debenture holders. This is the best practice and ensures legal validity.
Certificate from the Auditor: A certificate from the statutory auditor confirming that the company has no creditors is also an essential document to annex with the petition.
Conclusion
If a company is shifting its registered office from one state to another and has no creditors, it is not required to annex a list of creditors. Instead, the company should annex the following:
A certificate from the statutory auditor confirming there are no creditors.
An affidavit from the directors stating that the company has no creditors or debenture holders.
While a declaration on the letterhead could be an alternative in certain cases, an affidavit is preferred for its legal binding nature.
In the case of a company shifting its registered office from one state to another, there are specific requirements related to the petition and the documentation that needs to be submitted, especially if there are no creditors.
Here’s a breakdown of the process and the key requirements:
1. Requirement for List of Creditors
Under Section 17 of the Companies Act, 1956, when a company proposes to shift its registered office from one state to another, it must file a petition with the Company Law Board (CLB) (now the National Company Law Tribunal (NCLT) after the 2013 amendment).
If the company has creditors, a list of creditors must be annexed to the petition. However, if there are no creditors in the company, the company is not required to annex the list of creditors.
2. Documentation When There Are No Creditors
If there are no creditors (including debenture holders) in the company, the company is still required to provide certain documentation to support this claim.
Typically, the documents to be annexed include:
A certificate from the statutory auditor stating that there are no creditors in the company.
An affidavit from the directors confirming that the company has no creditors.
While some practitioners may use a declaration from the director on the company's letterhead instead of an affidavit, the affidavit is generally considered more formal and legally binding.
3. Legal Basis and Practice
The Companies Act does not specifically mention the exact documentation to be annexed when there are no creditors in the context of shifting the registered office. However, these are standard practices that have been followed and accepted by the Company Law Board (CLB) and are now adhered to by the National Company Law Tribunal (NCLT).
Section 17 does not provide the specific format of the documents, but it is accepted that a certificate from the statutory auditor and an affidavit from the directors will suffice.
This practice is followed to ensure that the company’s claim of having no creditors is legally substantiated and can be validated.
4. Affidavit vs. Declaration from the Director
While a declaration on the letterhead from the directors stating that there are no creditors might be acceptable in informal settings, an affidavit carries more weight legally, as it is sworn under oath. The affidavit would make it a formal, legally binding declaration that the company has no creditors or debenture holders.
5. Best Practice
Affidavit from Directors: It is recommended to provide an affidavit from the directors affirming that the company has no creditors or debenture holders. This is the best practice and ensures legal validity.
Certificate from the Auditor: A certificate from the statutory auditor confirming that the company has no creditors is also an essential document to annex with the petition.
Conclusion
If a company is shifting its registered office from one state to another and has no creditors, it is not required to annex a list of creditors. Instead, the company should annex the following:
A certificate from the statutory auditor confirming there are no creditors.
An affidavit from the directors stating that the company has no creditors or debenture holders.
While a declaration on the letterhead could be an alternative in certain cases, an affidavit is preferred for its legal binding nature.
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