The Ministry of Corporate Affairs (MCA) has recently notified amendments to the Companies (Incorporation) Rules, 2014, easing the process for companies to shift their registered office from one state or union territory to another, effective from 21st October, 2023.
MCA Notification dated 20/10/2023: Company RO Shifting Rules Simplified; Additional Cost Revoked
Key Changes
The amendments revoke the discretionary power of the Regional Director (RD) to impose additional costs for shifting a company’s registered office across states. Previously, the uncertainty of additional costs being imposed by ROC acted as a deterrent for companies looking to change their registered address.
The RD has also been given explicit authority to approve the shifting of registered office for companies acquired under a resolution plan approved by the Insolvency and Bankruptcy Code (IBC). This will boost ease of doing business for companies revived under IBC by removing procedural hurdles for changing their registered office address.
Impact
The amendments will make it easier and more cost-effective for companies to change their registered office address from one state to another. Companies undergoing corporate restructuring or acquiring assets across states can now seamlessly update their registered address without incurring substantial additional costs.
For companies acquired through IBC resolution plans, the changes will remove administrative hurdles in implementing new registered office addresses under the new management.
By reducing the regulatory burden, the MCA has acted to support the ease of doing business in India. Companies can now adapt to new business models and structures with greater flexibility.