Secretarial Audit: Applicability, Scope, and Process

Meaning Of Registered Office Of A Company

The registered office of a company is its principal place of business, serving as its official address for all legal and government-related correspondence. It must be a physical postal address located within the Registrar of Companies (ROC) jurisdiction where the company is registered.

It is not necessarily the same as the place where day-to-day operations are carried out (corporate office or branch office). Instead, it ensures that government authorities and stakeholders know where to contact the company for statutory purposes.

Registered Office Requirement during Company Registration

At the time of incorporation, every company must declare its registered office. For this, certain documents are required:

• Proof of address (electricity bill, water bill, or property tax receipt, not older than 2 months)
• No Objection Certificate (NOC) from the landlord (if the property is rented)
• Rent/lease agreement in case of rented premises, or property ownership documents in case of owned premises

If the company does not have a permanent office at the time of registration, it can declare a temporary address. However, the final registered office must be filed with the ROC using Form INC-22 within 30 days of incorporation.

Importance Of the Registered Office Of A Company

Declaring and maintaining a registered office is a legal mandate under the Companies Act, 2013. Its importance can be summarised as follows:

• Legal Compliance: A company must have a registered office within 30 days of incorporation.
• Official Address for Communication: All government notices, summons, and correspondence are sent to this address.
• Use on Official Documents: The registered office address must be printed on all letterheads, invoices, business correspondence, and official publications.
• Jurisdictional Relevance: It determines the ROC jurisdiction under which the company falls and where records are maintained.

Without a registered office, a company cannot be considered legally compliant.

Change In The Registered Office Of A Company

Companies may shift their registered office after incorporation. The process depends on the nature of the change:

1. Change within the same city/town/local limits: Notify the ROC by filing Form INC-22 within 15 days.
2. Change outside local limits but within the same ROC jurisdiction: Requires passing a special resolution and filing with the ROC.
3. Change from one ROC jurisdiction to another (state-level change): Needs approval from the Regional Director, shareholder consent via special resolution, and filing of required forms (INC-22 & MGT-7).

In every case, the company must update its address on all official documents.

Registered Office of an LLP

Like companies, Limited Liability Partnerships (LLPs) are also required to declare a registered office during incorporation. This is where all legal and government correspondence is sent. Any change must be filed with the ROC using Form 15.

Register your LLP and enjoy flexibility with limited liability protection.

Registered Office of a Private Limited Company

A Private Limited Company must declare its registered office within 30 days of incorporation and notify the ROC of any change through Form INC-22. It acts as the official point of communication and is used on all business documents.

Set up your Private Limited Company to gain credibility and attract investors.

Registered Office of a One Person Company (OPC)

For an OPC, the registered office requirement is the same as that of other companies. It must be declared during incorporation, and any changes should be reported to the ROC. Since OPCs have single ownership, the registered office is key in establishing legal identity.

Incorporate your OPC to run your business independently with limited liability.

Difference Between A Registered Office And A Corporate Office

Many businesses confuse the registered office with the corporate office, but they serve different purposes:

• Registered Office:
  
  
  • Legal requirement under the Companies Act
  • Official address for receiving government and legal communications
  • Determines the jurisdiction of the ROC
  • Must appear on all statutory documents
    
    
• Corporate Office:
  
  
  • Operational headquarters of the company
  • Where executives and employees manage daily business activities
  • Focuses on decision-making, sales, and operations
  • Not a legal mandate under the Companies Act

In simple terms, the registered office gives the company its legal identity, while the corporate office drives its business operations.

Frequently Asked Questions (FAQs)

Importance of Business Licenses

Business licenses play a crucial role in India's business landscape for several reasons:

Legal Compliance

• Obtaining the necessary licenses ensures that businesses operate within the legal framework defined by government regulations.

Consumer Trust and Safety

• Certain licenses, such as FSSAI licenses for food-related businesses or health licenses for healthcare providers, signify compliance with safety and quality standards.

Public Health and Environmental Protection

• Licenses related to environmental clearances, waste management, and pollution control are essential for businesses to mitigate their environmental impact.

Taxation and Revenue Generation

• Business licenses, such as GST registration and professional tax registration, facilitate tax compliance and revenue generation for the Government.

Regulation of Market Competition

• Certain licenses, such as trade licenses and import-export licenses, regulate market entry and competition.

Employee Welfare and Labor Rights

• Labor licenses ensure that businesses adhere to labour laws and provide a safe and fair working environment for employees.

Last but certainly not least, business licenses are a badge of honour for your business. They show investors, partners, and customers that you're serious, professional, and committed to doing things the right way. In a crowded marketplace, that kind of credibility can make all the difference.

Common Types of Business Licenses in India

In India, obtaining the necessary business licenses depends on the type of business activity you intend to undertake and the location in which you plan to operate. Here are some common types of business licenses required in India:

Business Registration:

While not classified as a license, registering a business with the Ministry of Corporate Affairs (MCA) in India is a fundamental legal requirement if you are an entrepreneur establishing a business venture.

Depending on the type of business structure chosen, such as sole proprietorship, partnership, limited liability partnership (LLP), or private/public limited company, the eligibility criteria, registration process, and compliance obligations can vary significantly.

There are primarily following types of Business structures:

•  Private Limited Company

•  Limited Liability Partnerships

•  One Person Company

•  Public Limited Company

•  Sole Proprietorship

•  Partnership

Ultimately, registering your business with the MCA not only establishes its legal legitimacy but also lays the foundation for growth, credibility, and long-term success in the Indian startup ecosystem.

For detailed information regarding the eligibility criteria, registration process, and compliance obligations associated with different business structures, check out the link below.

Company Registration in India - Online Incorporation Process Explained

Udyam Registration - MSME License

Similarly, Udyam Registration is not technically a license. However, it provides recognition and certain benefits to Micro, Small, and Medium Enterprises (MSMEs) in India.

The eligibility criteria for Udyam Registration are based on the investment, turnover, years of establishment, etc.

Once registered as an MSME, you can receive a unique Udyam Registration Number (URN) and a certificate that gives access to government schemes, subsidies, and incentives.

GST Registration

In India, Goods and Services Tax (GST) registration is mandatory for businesses meeting certain turnover thresholds, which is Rs. 40 Lakhs (for goods) and Rs. 20 Lakhs (for services) or engaging in specified activities.

Here's an overview of the process of obtaining GST registration, which is not exactly a license but a crucial registration for businesses:

• Access the official GST portal.
• Fill out the registration form with accurate details regarding your business activities, turnover, and so on.
• Furnish the necessary information, including business details, PAN, Aadhaar, bank account details, and relevant documents.
• Upon successful verification, you will be issued a unique Goods and Services Tax Identification Number (GSTIN)- a 15-digit unique identifier for the businesses under the GST regime.

Professional Tax Registration

Professional Tax Registration is a requirement for employers and individuals engaged in certain professions, trades, or employment in India. It is a state-level tax levied by the respective State Governments for the welfare of professionals and workers in various sectors.

In some states like Maharashtra, obtaining professional tax registration is mandatory.

Shops and Establishment License

The Shops and Establishment License is a mandatory requirement for businesses operating within a specific jurisdiction, typically at the state level, in India. It is governed by the respective state Shops and Establishment Act and its rules, which vary slightly across different states.

The primary purpose of the Shops and Establishment License is to regulate the operations of shops, commercial establishments, and other businesses within a state with provisions related to-

• Working hours
• Welfare and safety of employees
• Employment practices

The Shops and Establishment License is usually valid for a specific period, after which it needs to be renewed to continue operating legally. A valid Shops and Establishment License is often required for various business activities, including obtaining other licenses, permits, or registrations.

Trade License

A trade license is a legal permit issued by the local municipal authority or council that authorizes your business to engage in specific commercial activities within a designated area or jurisdiction.
Trade licenses specify the types of commercial activities that a business is permitted to undertake. These activities may include manufacturing, trading, storage, distribution, or provision of certain services, depending on the nature of the business and local regulations.

In order to obtain a Trade license, you must submit an application to the local municipal authority or council responsible for issuing licenses. The application process typically requires businesses to provide certain documents, such as -

• Proof of identity,
• Address proof,
• Proof of ownership or tenancy of the premises
• Approvals and NOCs (No Objection Certificates) from relevant authorities

Once the application is approved and all requirements are met, the local authorities will issue the trade license to your business, specifying the permitted activities, duration of validity, and any conditions or restrictions.

Labour License

Labour licenses, also known as labour permits or labour registrations, are legal authorizations issued by government authorities (Shram Suvidha Portal) to businesses, particularly those employing a significant number of workers, to ensure compliance with labour laws and regulations.

It safeguards the rights and interests of workers by setting standards for fair treatment, safe working conditions, and adequate remuneration. These licenses often require businesses to adhere to minimum wage laws, working hour restrictions, overtime compensation, leave entitlements, and other labour standards aimed at promoting employee well-being.

The process of obtaining a labour license may vary depending on the jurisdiction and the specific requirements imposed by labour laws and regulations.

Food Safety and Standards Authority of India (FSSAI) License

The Food Safety and Standards Authority of India (FSSAI) license, commonly referred to as the FSSAI license, is a mandatory requirement for businesses involved in the manufacturing, processing, packaging, storage, distribution, and sale of food products in India.

Obtaining an FSSAI license is a legal requirement for food businesses operating in India. It is mandated by the Food Safety and Standards Act of 2006, and non-compliance can result in penalties, fines, or even closure of the business.

Depending on the scale and nature of the business, there are different types of FSSAI licenses, such as Basic Registration, State License, and Central License, each catering to specific business activities and turnover thresholds.

Import-Export License

An import-export license, also known as an import-export permit, is a legal authorization issued by government authorities that allows businesses to engage in the importation and/or exportation of goods across international borders.

An Importer Exporter Code is mandatory for the export and import of goods. It is a 10-digit identification number that is compulsory for the purpose of exporting from India as well as for the purpose of importing to India. It has lifetime validity.

The process to obtain an Import Export Code (IEC) registration certificate online involves several steps, as outlined below:

• Fill out the Application Form.
• Gather the necessary documents as per the requirements specified.
  • For Private Limited/ LLPs- Company PAN Card, Incorporation Certificate, Aadhar Card, PAN Card of all Directors/Partners, and Cancelled Cheque of the Company.
  • For Partnerships- Partnership Firm PAN Card, Partnership Deed, Aadhar Card, PAN Card of all Partners, and Cancelled Cheque of the Partnership Firm.
• Pay the required Fees.
• Upon successful verification and processing, the Import Export Code (IEC) registration certificate will be issued. You will receive the certificate electronically using the registered email ID provided during the application process.

While we covered some common licenses necessary for businesses in India, certain industry-specific licenses and permits exist that are crucial for compliance with sector-specific laws, regulations, and standards. These can vary widely depending on the nature of the industry, the type of activities involved, and the potential risks or impacts associated with the operations.

Business Registration with Razorpay Rize

To conclude, securing these licenses is crucial for the seamless operation of your business. However, it's essential to prioritize registering your business as a legal entity beforehand, as this step is often a prerequisite for applying for most of these licenses.

Razorpay Rize simplifies this fundamental yet vital aspect of the process with its online company registration services. To learn more about how Razorpay Rize can assist you, click below.

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What is a Certificate of Commencement of Business?

The Certificate of Commencement of Business is a mandatory legal document that certain companies in India must obtain before they start their business activities. It is issued by the Registrar of Companies (ROC) under the Companies Act of 2013, and applies specifically to public and private companies limited by shares.

Beyond legal compliance, this certificate also plays a big role in establishing trust. It shows investors, banks, and stakeholders that your company has met all foundational requirements and is operating within the bounds of the law. It also helps prevent fraudulent incorporations by ensuring that companies follow due process from the start.

Significance of Commencement of Business Certificate

The Certificate of Commencement of Business serves multiple purposes:

• Legal Authorisation: It acts as formal approval for a company to start its operations.
  
• Regulatory Compliance: Ensures adherence to the provisions of the Companies Act of 2013.
  
• Prevention of Fraud: Minimises the risk of shell companies or fraudulent incorporations.
  
• Credibility: Enhances trust with investors, financial institutions, and stakeholders.
  
• Access to Funds: Allows the company to exercise borrowing powers and raise capital legally.
  

Commencement of Business under Companies Act 2013 – Old Act and Procedure

Under the Companies Act, 2013, companies with share capital cannot begin operations immediately after incorporation. While companies without share capital may commence business right after receiving the Certificate of Incorporation, those with share capital must secure a Certificate of Commencement of Business as per Section 11 of the Act and Rule 24 of the Companies (Incorporation) Rules, 2014.

This requirement is applicable to all newly formed public and private companies with share capital, highlighting the importance of meeting initial capital commitments and completing registration protocols before beginning operations or seeking external financing.

Position Under Erstwhile Companies Act, 1956

Previously, the Companies Act of 1956 governed the commencement of business for companies in India. Under this law, only public companies with share capital were required to obtain a Certificate of Commencement of Business. Private companies, on the other hand, were exempt and could begin operations immediately after incorporation.

The 2013 Act introduced more stringent rules, bringing private companies with share capital under the same requirements to enhance transparency and accountability.

Certificate of Commencement of Business Under Companies Act 2013

To obtain this certificate under the current law, companies must meet two critical requirements:

1. Declaration by a Director: The director must declare that every subscriber to the memorandum has paid for the shares they subscribed to.
   
2. Registered Office Verification: The company must file verification of its registered office with the ROC.
   

Only after fulfilling these conditions can the company apply for the certificate and begin lawful operations.

Eligibility Criteria for Commencement of Business Certificate

The Certificate of Commencement of Business (COB) is mandatory for the following categories of companies:

• Companies Incorporated on or after November 2, 2018: Any company registered after this date is required to obtain the COB Certificate within 180 days from the date of incorporation.
  
• Companies with Share Capital: Regardless of industry or business type, all companies with share capital must apply for and secure the COB Certificate before starting operations.
  

Which Company is Not Required to File a Certificate of Commencement of Business?

The following categories of companies are exempt from filing for the Certificate of Commencement of Business. These include:

• Companies Incorporated Before November 2, 2018: This exemption applies to companies that were established prior to the implementation of the Companies (Amendment) Ordinance, 2018, specifically before November 2, 2018.
  
• Companies Registered After November 2, 2018, Without Share Capital: Companies that were incorporated after November 2, 2018, but do not have a share capital structure, meaning they haven’t issued any shares, are also exempt from obtaining the COB Certificate.
  

Documents Required to Obtain Commencement of Business Certificate in India

To apply for the Certificate of Commencement of Business, companies must submit the following documents:

• Form INC-20A: A declaration filed by a director.
  
• Board Resolution: Approving the commencement of business.
  
• Proof of Capital Subscription: Evidence that all subscribers have paid their share value.
  
• Registered Office Proof: Utility bill or rental agreement confirming office address.
  
• Certificate of Incorporation: Issued by the ROC.
  

Application Process for Commencement of Business Certificate

Here’s a detailed walkthrough:

1. Log in to the MCA Portal
   Visit the official website of the Ministry of Corporate Affairs (MCA). Log into the MCA portal using your registered credentials (User ID and Password). If you are not registered yet, you must create an account first.
   
2. Navigate to the e-Filing Section
   After logging in, go to the 'MCA Services' tab and select the 'e-Filing' option. This section contains all the necessary forms and submission options for company-related filings.
   
3. Download and Fill out Form INC-20A
   Locate and download Form INC-20A- the specific form used for the Declaration of Commencement of Business. Carefully fill in all the required details, such as company information, paid-up share capital details, and confirmation of compliance with registration requirements.
   
4. Select the Correct Corporate Identification Number (CIN)
   Enter and double-check the Corporate Identification Number (CIN) of your company. This number uniquely identifies your company and ensures the form is linked to the right entity.
   
5. Attach the Required Documents
   Upload the necessary supporting documents, which typically include:
   
   • The director’s declaration that the subscribers have paid all share capital
     
   • Proof of registered office verification (such as a utility bill, rent agreement, or ownership document)
     
6. Select the Correct Corporate Identification Number (CIN)
   Enter and double-check the Corporate Identification Number (CIN) of your company. This number uniquely identifies your company and ensures the form is linked to the right entity.
   
7. Submit the Form and Pay the Prescribed Fee
   Once the form and attachments are ready, submit them through the portal. Pay the applicable government fee based on your company's authorised share capital. The payment can usually be made online through various options available on the MCA portal.
   
8. Receive the Service Request Number (SRN)
   After successful submission, the system will generate a Service Request Number (SRN). Save this number carefully, it will help you track the status of your application and any future correspondence regarding your Certificate of Commencement of Business.
   

Time Limit for Filing the Declaration of Commencement of Business

As per Section 11 of the Companies Act, 2013, the declaration must be filed within 180 days from the date of incorporation. Failure to do so can lead to:

• Penalties for the company and its officers.
  
• Potential strike-off from the ROC register
  

Form INC-20A

Form INC-20A is the declaration form filed to confirm the commencement of business. It must be signed by a director and certified by a professional (CA/CS/CWA). The form includes:

• Company details
  
• Paid-up capital confirmation
  
• Registered office address verification
  

Fee For Filing Form 20A and Receiving Commencement of Business Certificate

The fee for filing Form INC-20A depends on the company's authorised share capital:

Consequences of Not Filing Certificate of Commencement of Business

Failing to file Form INC-20A within the 180-day window leads to:

• Penalty of ₹50,000 for the company.
  
• ₹1,000 per day penalty for each defaulting officer, up to ₹1 lakh.
  
• ROC may strike off the company’s name if it remains inactive under Section 11(3).
  

Conclusion

Obtaining the Certificate of Commencement of Business is a critical step that validates your company's readiness to operate in India’s regulatory landscape. For public and private companies with share capital, understanding and complying with this requirement ensures legal clarity, business credibility, and uninterrupted growth. By following the correct process, submitting the necessary documents, and meeting deadlines, companies can avoid heavy penalties and begin their entrepreneurial journey on the right foot.

Frequently Asked Questions