What is the address of your company’s “registered office”?
Without looking, do you know the address of your company’s registered office? Importantly, you should be aware that it might not be the same as your principal place of business. Understanding the difference between the two could one day save immense stress, legal costs and ultimately your company!
Critically, amongst other things, 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.
Let us consider for a moment that 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 visit family several suburbs over and decide that moving closer to them is what your family wants. Once relocated you settle in and are still able to make a slightly longer trip to work.
Several months pass, the kids are loving school, all your personal relationships are thriving, and the manufacturing business is booming. Then the phone rings. You answer. 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? Why did the company go into liquidation? The business is profitable and can pay all of its debts. You soon learn that 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, in this case, had begun issuing invoices, statements, statutory demands and finally a winding up notice to the company’s registered office address after you had moved. The mail had never been redirected and other means of contact or mediation not sought.
Clearly you would be left confused and shaken if this was your reality. Believe it or not, situations like the one in the above 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. Your accountant should be able to advise what your registered office address is but failing that, you can either review your records or perform a search on the Australian Securities and Investments Commission database.
The message here is to ensure you have a system in place to deal with incoming correspondence where your registered office address is not your principal place of business, or that of your accountant. Using this article as a simple conversation starter at your next appointment with your accountant could save you from the significant cost and stress detailed in the example above.