The company registered office – more than an anachronism

company accountants

By Tony Lane 

Tony Lane

“What’s the address of the Company’s registered office”, I asked a company director.  His response, perhaps predictably, was to recite the trading address of his company’s business.  A repeat enquiry yielded no change.  Asked if he knew the difference between the two, it was clear he did not.

A company’s registered office is more than just an anachronism of law.  It serves a relevant purpose under the Corporations Act 2001.  Critically, amongst other things, it is the place where documents can be effectively ‘served’ on a company[1].  ‘Service’ is an oft-fraught legal term which I won’t delve into here, other than to say it is generally the manner by which important (read: especially Court) documents are delivered, in this case to a company.

Upon their registration, many companies will adopt their accountant’s address as the registered office – meaning any important documents will be sent or delivered to that address.

However, what happens if you change accountants or simply stop communicating with that accountant.  Whose job is it to update the details of the registered office?  Turns out, it falls on the company’s directors – and it has to be done within 28 days of the change or badness may prevail!

“What badness?” I hear you ask.  Well, consider this recent example.  Company A commenced trading in late 2013.  It was newly incorporated and placed its registered office with its proposed accountants.  Trading was brisk and profitable, however neither director engaged further with that accountant and reverted to using a bookkeeper instead.  A rift between the directors saw one exit the business in late 2014, however the departing director was the previous contact point for the accountants (and as it so happened, the bookkeeper).

Fast forward now to 2016 and a disgruntled creditor served a statutory demand, followed by a winding up application, on the registered office of the company – namely, the accounting firm.  Leaving aside the manner in which the accountants informed (or didn’t as the case was) the company, the remaining director had no knowledge of the important documents that were now in play.  These circumstances led to the winding up of an otherwise solvent company, at an ultimate cost well in excess of the debt claimed by the creditor.

The hard learned lesson for the director was to ensure that he knew, and kept up to date, the company’s registered office.  Had he done so, he would likely have been able to head off the creditor and resultant cost of extrication from winding up.

[1]  See e.g. section 109X(1) Corporations Act 2001

Want to know more?

If you would like to know more about the issues raised in this article, please contact Tony Lane our Insolvency & Reconstruction Director for assistance.

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