Wish to open a new branch is the management of the company’s next step

Wish to open a new

branch, it is always

tempting to develop or

expanding our business

by opening a new branch

office. There are some

significant things you must

keep in your mind before

start up.

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registration-coimbatore.php

There is no specific provision under the 2013 Act with respect to the

opening of new branches which are matters day to day for the

Management of the company to decide. It may be required to have

a resolution of the Board of Directors and for this purpose call and

hold a meeting of the Board in accordance with the procedure.



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Every branch may be treated as an

establishment or unit or division and

accordingly certain registrations such as

registration for the Value Added Tax

purposes or registration under the Shops

and Establishments Act may be

necessary. A branch can also carry on

only that business for which the company

is authorised by its memorandum.



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In the case of “Nidhi Company”, a “Nidhi” may open branches, as

per its wish but, only if it has

earned net profits, after tax

continuously during the

preceding three financial years.

Further subject to the provisions, a

“Nidhi” may open up to three branches within the district.



If it opens more than three branches outside or within the district, it

shall obtain the prior permission of the Regional Director and need to

intimate to the registrar within thirty days about the opening of each

and every branch.

No “Nidhi” shall open branches or collection centres or offices or deposit centres, or the registered office is situated whatever the name

called outside the state.

Nidhi shall not open branches or collection centres or offices or

deposit centres, or the financial statement and annual return (up to

date) are filed with the Registrar unless it is called by some name


Conditions to Remember

A “Nidhi” shall not close any branch

unless it-

(a) publishes an advertisement in a

newspaper in the vernacular language,

about its closure thirty days prior, in

order to inform this to the public.

(b) The advertisement copy will be

fixed or a notice which informs about

such closure of the branch on the notice

board of “Nidhi” for a period of at least thirty days from the date of the

advertisement was published under

clause and gives an intimation to the

Registrar within thirty days of such

closure.



In the case of a Non-banking Financial Company [NBFC], opening a new

branch where the NBFC is a company engaged in lending against gold

jewellery, no new branch can be opened by such an NBFC without first

ensuring that suitable arrangements are made for security and for storage

of gold jewellery, including safe deposit vault.

Non-Banking Financial Company must obtain a prior approval from the

Reserve Bank for the new branches in the case of exceeding

1000.However, NBFCs which already have more than 1000 branches may

approach the Bank for prior approval for any further branch expansion.



If the opening of a new branch is a very important activity or

milestone, it may be necessary to notify stock exchanges under

clause 36 of the Listing Agreement.If there is any special

provision under the shareholder agreement or any other

agreement with respect to opening new branches or closing of

branches, please ensure to comply with those provisions.

For the opening of any branch of your company abroad

comply with the provisions of the Foreign Exchange

Management Act, 1999 to the extent applicable.





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Wish to open a new branch is the management of the company’s next step