If you choose a registered office service, you can gain numerous advantages, but it matters which company you entrust with this task. Here are the legal criteria you should be aware of.
A registered office is one of the fundamental requirements for company formation, as legislation stipulates the need for a location for administrative purposes, correspondence handling, and official inspections. However, it is not a requirement to designate your own property for this purpose; a service agreement with a registered office provider is perfectly adequate for lawful operation—in fact, this option is actually a particularly smart choice.
3+1 Cases When a Registered Office Service Is the Best Decision
- If you do not have your own property available, or there is no family member or acquaintance who would consent to having the company registered at their property.
- If you wish to spare yourself from having your mailbox filled with official correspondence, and you do not want authorities visiting your own home during an inspection.
- If you wish to establish a sole proprietorship, or the number of employees is low, and there is no guarantee that someone is always present at the registered office during business hours.
+ 1: If you simply do not wish to take on the burden of administrative tasks, and would rather devote your time to professional advancement.
Legal Criteria for Registered Office Services in a Nutshell
If you decide to enter into a service agreement, you must carefully consider which company you entrust with the task and responsibility. The chosen company’s duty is to fulfill the requirements prescribed for registered offices, which are set out in Ministry of Justice Decree No. 7/2017 on registered office services. Due to previous abuses, the NAV strictly monitors compliance with these requirements; let us review the most important points:
- The use of a registered office service is only considered official if a written agreement is reached, meaning a contract is prepared. The contract may not be for a fixed term, and it cannot be terminated by ordinary notice within one year of its conclusion.
- A registered office can only be a property that is in the exclusive ownership of the service provider company, or another option acceptable under the decree is if the right of use has been registered in the land registry.
- The decree specifies which documents must be kept at the registered office, including company documents, official permits, documents related to data reporting obligations prepared for the NAV, as well as financial statements under the Accounting Act.
- The service provider must conduct a client due diligence procedure when concluding the contract, and must also monitor for circumstances indicating legal violations thereafter, and is obliged to report them when applicable.
Why Is All This So Important for Your Company?
Beyond the Ministry of Justice decree, Act CL of 2017 on the Rules of Taxation also has related provisions, as it establishes all obligations associated with registered offices. Although the items listed therein fall within the duties of the registered office provider company, the consequences arising from non-compliance with the rules affect the client. Violation of the rules can lead to the suspension of the client company’s tax number, which essentially makes income-generating activity impossible.
Based on this, you surely have no doubt that while your company gains a great deal with this solution, it is just as much a trust-based service as, for example, that of an accountant, so the choice must be carefully considered. If you are looking for a reliable registered office provider company, you need look no further—you have come to the right place. Familiarize yourself with our service packages and if one appeals to you, contact us with confidence.
