Only doing business is not the end, one always wishes to expand its business by opening a new Branch. Procedure to be followed by every company registered under the Companies Act to open a new Branch is explained hereunder:

• Verify Business of New Branch– Verify that the business to be transacted at the new branch proposed is covered by Memorandum of Association (MOA).

• Convene a Board Meeting – Board Meeting is to be convened after giving notice to all the directors of the Company.

• Pass the resolution – In Board Meeting, pass the resolutionto open the particular Branch describing the business to be carried thereat, to authorise somebody to arrange accommodation, establishment and other things to run the branch and to appoint someone to look after day to day business of the branch and to operate the bank account of the branch.

• Pass the Special Resolution – In order to comply with section 149(2A) with regard to commencement of a new business, pass a special resolution and file the declaration.

• File Form No. 23 – E-file the Special Resolution in Form No. 23 within 30 days of its passing, with the concerned ROC along with requisite fees.

• File Form No. 20A – E-file the declaration in Form No. 20A and file with it a copy of the Special Resolution as attachment, with the concerned ROC.

• Digitally Signed – Ensure that the said Forms are digitally signed by the managing director or director or manager of the company and is certified by a chartered accountant or a cost accountant or a company secretary in whole time practice by digitally signing the said e-form, wherever required.

• Send Filed Form No. 20A – Send the originally filled in and signed e-Form No. 20A on Stamp Paper to the concerned ROC’s office simultaneously failing which the filing will not be considered and legal action will be taken.

Fine in Cases of Default & Contravention

• Default to give notice – Every officer of the company whose duty is to give notice of the Board meeting as aforesaid and who is in default will be punishable with fine of upto Rs. 1000.

• Default to file Special Resolution – The Company and every officer of the company who is in default will be punishable with fine of upto Rs. 200 for every day during which the default continues.

• Contravene section 149(2A) – If your company commences any business in contravention of section 149(2A), every person who is responsible for the contravention will be liable for fine upto Rs. 5,000 for every day during which the default continues.

Additional steps by Listed Companies If shares of the company are listed on a Stock Exchange, then take the following steps:

• Forward three copies of notice and a copy of the proceeding of the General Meeting in which the Special Resolution is passed.
• Notify the change if such opening of a new branch amounts to a change in the general character or nature of the company’s business.

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