What is the difference between the formal and the actual registered office?
Common sense says that the company's headquarters is simply the place where you do business. Legally, it's not that simple. The law makes a distinction between the formal and actual registered office of a business. We'll explain the difference between the two.
Formal registered office
The registered office is generally considered to be the address entered in a public register (typically a commercial or trade register). The registered office of an individual used to be referred to as the place of business, but this is no longer the case and the name is common to all businesses.
You are required by law to have a registered office address:
- prominently display a sign with your company ID number and business name (company name) / name and surname (in the case of a self-employed person);
- be accessible to the public administration.
Note: If, as a self-employed person, you formally establish your registered office at your permanent home address, you do not need to identify the property - nor do you need to prove the legal reason for using the premises. We will also add that you cannot place the registered office at the office address (if you have a formal permanent residence there).
The actual registered office
The actual registered office plays a role, especially for VAT payers, as it determines which tax office your company falls under. The state administration may also claim your actual registered office when dealing with other matters, such as income tax. This institute was introduced, among other things, to avoid overburdening the tax authorities.
According to the VAT Act, a company's actual registered office is the place where major management decisions are taken or the address where the company's management meets. The actual seat of an individual is most often the place of residence.
The actual residence is based on an EU Council Regulation which targets situations where a company has its official seat in a different country than where it actually operates. For example, if a company is formally established in Malta but its entire management has offices in Paris, it is in reality a French company.
The Directorate General of Taxation requires that the company can be traced and contacted at the address of its real registered office. The entrepreneur must also allow a tax audit here, including access to records.
It is common for the company's real registered office to be located in a different place from the official one. In such a case, it is sufficient to report the address of the actual registered office to the tax office. This information is normally provided, for example, when registering for VAT.
Tip! Do not forget to also provide the tax office with proof of the legal relationship under which you use the registered office (e.g. by means of a lease agreement).
In addition to the registered office, the law also mentions the term "business premises", which is "thepremises in which the business is carried on". This means a shop, workshop, etc. - in theory, a vending machine can also be an establishment.
While there is only one official registered office, a company may have several premises (the premises may be at the same address as the registered office). A business may not even have an official place of business at all.
The opening and closing of a business establishment must be reported to the Trade Licensing Office.
The notification should state:
- the business name, company name, possibly the name and surname of the self-employed person;
- your registration number;
- the address of the establishment;
- the subject of the business of the establishment, and in the case of free trades, the field of activity;
- the date of commencement/termination of the activity of the establishment.
You must visibly mark the establishment externally with the business name, the name or the name and surname of the entrepreneur + his/her ID number (see §17 of the Trade Licensing Act). When marking a mobile establishment or a vending machine, you must also indicate the address of your registered office.
Each establishment (except for vending machines) must also have a designated person responsible for compliance with the regulations at the location. You must also mention his/her name on the label of the establishment.
If you sell goods or provide services in the establishment, you should also add information on the opening hours (not applicable to mobile establishments and vending machines). In addition, accommodation establishments must indicate their category and class.
What about virtual residences?
With a virtual seat from us, you can easily meet the legal requirements. You automatically obtain the property owner's consent to the location of the registered office at the address you choose, and we also take over correspondence for you at that address.
If you are a VAT payer, you only need to report to the tax office the address where your management actually meets.
Are you considering a virtual registered office for your company? Contact us via the form or order your seat online.