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Norms for firms to update address tightened

The government has tightened the norms for companies to update the address where they maintain their books of accounts if it is different from their registered office. The move is expected to bring companies under greater monitoring and would help weed out shell companies.

The Ministry of Corporate Affairs has notified the Companies (Accounts) Amendment Rules, 2023 to make changes in the details, which are required to be filed by a company, keeping its books of accounts at a place other than the registered office.

The new forms, effective Monday, require a company to provide the specific longitude and latitude of the address, proof of address including a conveyance or lease deed or rent agreement, copies of utility bill and a photograph of the registered office along with the board resolution. Earlier, the companies were required to submit only the Board Resolution along with the form for maintaining its books of accounts at a place other than the registered office.

Amit Maheshwari, Tax Partner, AKM Global, a tax and consulting firm said, “Considering the government’s prolonged efforts and increased scrutiny through recent amendments on the verification of the registered office, this amendment further sets out to ensure that the proper check is maintained and to identify and crack the whip on shell companies operating in India.”

The notification is a part of a series of amendments to the Companies Rules by the MCA relating to various aspects including incorporation, registration of foreign companies and appointment and remuneration of managerial persons.

In another amendment, limited liability partnerships, partnership firms and trusts planning to convert into private limited companies will have to provide a No Objection Certificate of all secured creditors and charge holders. Earlier an NOC was required only from the secured creditor.

The Companies (Authorised to Register) Amendment Rules, 2023 has also done away with two requirements that were supposed to be submitted at the time of conversion by these firms. These relate to written consent, from the majority of members whether present in person or by proxy at a general meeting, agreeing for the registration as well as an undertaking that the proposed directors would comply with the requirements of the Indian Stamp Act, 1899.

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