Do you know the address of your company’s registered office?
You should knowit might not be the same as your principal place of business.
Understanding the difference between the two could save immense stress, legal costs and your company.
The address of a company’s registered office is the place where documents can be effectively served. This means, if a supplier, employee or customer wanted to commence legal action, they would be correct in posting their legal notices to a registered office address.
Say you are a director of a manufacturing company. Your principal place of business is 1 Fake Street, but the address for the company’s registered office is your personal residence, 3 Cosey Avenue. One day you decide to relocate.
Several months pass, the manufacturing business is booming but then the phone rings. You’re told your company is now in liquidation, your directorship of your company is suspended, and the business must cease trading immediately pending an assessment by the liquidator.
But how did this even happen? The business is profitable and can pay all its debts. Apparently, a previous supplier had been careless with its invoicing so outsourced its collection activities to a third-party. The third-party collector had a policy to only issue correspondence to registered office addresses and had begun issuing invoices, statements, statutory demands and finally a winding up notice to the company’s registered office address after you had moved.
Believe it or not, situations like the one in the example occur more regularly than you would think. Thankfully, by applying to court and obtaining adequate advice, the winding up order was later terminated. But the interruption to business operations, the adverse publicity from the public notice that your company was in liquidation, the costs and stress are all negative implications worn from a simple oversight.
In many instances, your accountant’s address may be your registered office, in which case, there would be a system in place to advise you of any important or time sensitive correspondence received in relation to your company. Failing that, you can either review your records or perform a search on the n Securities and Investments Commission database.
Daniel Drayton isPKF’sbusiness recovery andinsolvency manager.