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Tuesday, 16 December 2014

Note On - Books of Accounts - Under CA, 2013

BOOKS OF ACCOUNTS, ETC., TO BE KEPT BY COMPANY
By
CS D Hem Senthil Raj and CS K Vinoth

INTRODUCTION:
As per Section 128 (1) of CA, 2013 every companies are required to prepare and keep at its registered office
(a)    Books of account and other relevant books and
(b)   Papers and financial statement for every financial year. 
including its branch office or offices, if any. 
DEFINITION OF BOOKS OF ACCOUNTS:
 Books of Account includes records maintained in respect of: 
(i)                 all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place;
(ii)               all sales and purchases of goods and services by the company;
(iii)             the assets and liabilities of the company; and
(iv)              the items of cost as may be prescribed under section 148 in the case of the Company which belongs to any class of companies specified under that section;
BRANCH OFFICE:
 Branch office in relation to a Company means any establishment described as such by the Company.
FAQ’s
 Whether the Records of the Company shall be kept other than the Registered Office?
 A Company can keep the above said documents and other relevant papers at any place in India as decided by the Board of Directors of the Company from time to time.
 However, the company shall intimate the Registrar by filing a Notice in writing giving the full address of the place where the records are kept within seven days from the date of decision taken by the Board.
 Whether Company can keep its books of accounts or other relevant papers in electronic format?
 Company can keep its records including the records of branch office, if any in electronic format as permitted under Section 128 of the Act subject to the rules prescribed in the rule 3 of Chapter IX of The Companies (Accounts) Rules, 2014.
 However maintenance of books of accounts in electronic mode is optional. 
ADDITIONAL COMPLIANCE FOR THE COMPANIES:
 The company shall intimate to the Registrar on an annual basis at the time of filing of financial statement-
 (a) the name of the service provider;
(b) the internet protocol address of service provider;
(c) the location of the service provider (wherever applicable);
(d) Where the books of account and other books and papers are maintained on cloud, such address as provided by the service provider.
In case of the Companies having branch office in India or Outside India, the Company shall be deemed to be complied with the  provision of this section if proper books of accounts relating to the transactions effected at the branch office are kept at the Registered office of the Company as per the mode of keeping of records prescribed by the Act.
MAINTENANCE OF RECORDS:
 Maintaining of Records at least for a period of Eight Years:
 The books of accounts of every company relating to a period of not less than eight financial years immediately preceding financial year
                                                                        or 
where the company had been in existence for a period less than eight years, in respect of all the preceding years together with the vouchers relevant to any entry in such books of accounts shall be kept in good order. 
CIRCULATION OF FINANCIAL STATEMENTS:
 Manner of circulation of financial statements in certain cases:
 In case of all listed companies 
and
 such public companies which have a net worth of more than one crore rupees and turnover of more than ten crore rupees, the financial statements may be sent-

ü  by electronic mode to such members whose shareholding is in dematerialised format and whose email Ids are registered with Depository for communication purposes.

ü  where Shareholding is held otherwise than by dematerialised format, to such members who have positively consented in writing for receiving by electronic mode; and

ü  by despatch of physical copies through any recognised mode of delivery as specified under section 20 of the Act, in all other cases.
RESPONSIBLE PERSONS FOR ENSURING COMPLIANCE:
 Who are the responsible persons to secure compliance with the requirement of books of accounts
 Following are the persons responsible to secure compliance with the requirement of books of accounts: 
a)      Managing Director
b)      Whole Time Director in charge of Finance
c)      Chief Financial Officer
d)      Any other person of the Company charged by the Board with the duty of complying with the provisions of Section 128 of the Act.

FORMAT OF NOTICE FOR KEEPING RECORDS, BOOKS OF ACCOUNTS ETC AS PER SECTION 128 OF THE ACT:

Notice of Keeping Records, Books of Accounts etc to Registrar of Companies as per Section 128(1) of Companies Act, 2013

Name of the Company:
Date of Board Meeting:
Full Address of the Place where Records of the Company shall be kept:

Particulars of the Records to be kept:
1.      .....................................
2.      .............................................
3.      ........................................

By
CS K Vinoth
CS D Hem Senthil Raj


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