As per the provisions of Section 2(13) of Companies Act, 2013, ‘Books of Accounts’ 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 takes place;
ii. All sales and purchases of goods and services by the Company;
iii. The assets and liabilities of the Company; and
Books of Accounts and other relevant papers shall have to be prepared by every Company and also have to keep at the registered office of the Company.
STATUTORY PROVISIONS RELATING TO MAINTAINING BOOKS OF ACCOUNTS OTHER THAN REGISTERED OFFICE
Section 128 of the Companies Act, 2013 provides-
Every Company shall prepare and keep at its registered office books of accounts and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the Company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting.
Provided that all or any of the books of account aforesaid and other relevant papers may be kept at such other place in India as the Board of Directors may decide and where such a decision is taken, the Company shall, within seven days thereof, file with the Registrar a notice in writing giving the full address of that other place.
Provided further that the Company may keep such books of accounts or other relevant papers in electronic mode in such manner as may be prescribed.
Whether the Company keep Books of accounts and other relevant papers related to the Company other than its registered office?
Yes, the books of accounts and other relevant papers may be kept at such other place in India other than the registered office of the Company as per the provisions of Section 128(1) of the Companies Act, 2013 subject to the prior approval from the Board of Directors of the Company by passing board resolution in a duly held Board Meeting and the Company shall also intimate to the Registrar of Companies about such change.
STEPS FOR MAINTAINING BOOKS OF ACCOUNTS OF THE COMPANY AT A PLACE OTHER THAN REGISTERED OFFICE OF THE COMPANY
1. Convene a Board Meeting
The Board of Directors of the Company shall call, hold and conduct Board Meeting as per the standards prescribed by ICSI in SS-1 for Board Meeting and to discuss the matter in respect of maintaining books of accounts of the Company at a place other than registered office of the Company and the Board of Directors shall pass Board Resolution in favor of the same.
2. Filing of E-form AOC-5
Company shall have to file e-form AOC-5 to the Registrar of the Companies within 7 (seven) days from the date of passing of Board Resolution along with providing the full address of such other place where the books of accounts of the Company will maintain.
ATTACHMENTS OF E-FORM AOC-5
> Copy of Board Resolution wherein a decision regarding address at which books of account are to be maintained has been taken is to be attached
> Any other information can be provided as an optional attachment
INSPECTION OF BOOKS OF ACCOUNTS
The books and other relevant papers maintained by the Company in India shall be open for inspection during business hours at the registered office of the Company or such other place in India where the Books of Accounts of the Company has been maintained.
PRESERVERANCE OF BOOKS OF ACCOUNTS
The Books of Accounts and other papers related to Company shall be kept by the Company for not less than 8 (Eight) financial years immediately preceding a financial year, or where the Company’s existence is less than 8 years than the Company shall keep the books of accounts from the existence period.
However, in case any investigation has been ordered, the books of accounts shall be kept by the Company for any longer period as per the directions of the Central Government.
PENALTY FOR NOT MAINTAINING BOOKS OF ACCOUNTS OF THE COMPANY
If the Company does not comply with the provisions of Section 128 of the Companies Act, 2013, the Managing Director, Whole-time Director in charge of Finance, the Chief Financial Officer or any other person of a Company shall be punishable with fine which shall not be less than Rs.50,000/- but it may extend to Rs.5,00,000/-.
DRAFT OF BOARD RESOLUTION
APPROVAL TO CHANGE THE PLACE FOR MAINTAINING THE BOOKS OF ACCOUNTS OF THE COMPANY
“RESOLVED THAT pursuant to the provisions of Section 128 of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification or re-enactment thereof for the time being in force), the consent of Board of Directors be and is hereby accorded for changing the place for maintaining the books of accounts, vouchers, invoices and other related documents of the Company from “___________________________________ (Previous Address)” to “_________________________ _____________(New Address)” with effect from _________ (date of approval for maintaining books of accounts of the Company).
RESOLVED FURTHER THAT any of the Director of the Company, be and is hereby authorized to execute the required documents and file intimations in e-form AOC-5 with the Registrar of Companies and such other statutory authorities as may be required, in such manner whether online using DSC or manually and to do all such acts, deeds, matters and things as may be necessary, desirable/expedient in connection therewith to give effect to the above resolution.”