Maintaining books of account at a place other than Registered Office | Section 128 | Companies Act, 2013
Article contains Statutory Provisions related to Maintaining Of Books Of Account At A Place Other Than The Registered Office or at a place outside India under Companies Act, 2013, Penalty if the books are not been maintained as per Section 128, Procedure of maintaining books of account at a place other than the Registered Office of the Company and relevant Draft Board resolution.
Section 128 (1) of the Companies Act, 2013 provides that every company shall prepare and keep at its registered office books of account 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.
However, First proviso Section 128 (1) of the Companies Act, 2013 further provides that to 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.
The wording of the proviso to Section 128(1) is “All or any of the books of account aforesaid and other relevant papers may be kept at such other place in India”. Accordingly, the company cannot keep the books outside India.
If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by the Board with the duty of complying with the provisions of this section, contravenes such provisions, such managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees or with both.
Note: Penalty under Section 128 of the Companies Act, 2013 is compoundable offence. You can read my article having comprehensive analysis on “Compounding of offences under Companies Act 2013”. Link of the same is: https://taxguru.in/company-law/compounding-offences-companies-act-2013-section-441.html
1. Hold a meeting of the Board or pass Board resolution by circulation:
To consider and approve place other than the registered office where books of accounts of the company may be kept;
To authorize CS or CFO or any director of the company to file a notice of address at which books of account are to be maintained with ROC.
2. File a notice of address at which books of account are to be maintained with ROC within 7 days of Board resolution in Form AOC-5 along with the requisite documents and fees.
3. The books of account of company relating to a period of not less than 8 financial years immediately preceding a financial years, or where the company had been in existence for a period less preceding years together with vouchers relevant to any entry in such books of account shall be kept in good order.
However, where an investigation had been ordered in respect of the company, the Central Government may direct that the books of account may be kept for such longer period than 8 years, as it may deem fit.
CONSIDERING AND APPROVING PLACE OTHER THAN THE REGISTERED OFFICE WHERE BOOKS OF ACCOUNT OF THE COMPANY MAY BE KEPT:
“RESOLVED THAT pursuant to the provisions of Section 128 of the Companies Act, 2013 read with Rules made thereunder (including any statutory modification or re-enactment thereof for the time being in force) consent of the Board of Directors of the Company be and is hereby accorded for keeping and maintaining Books of Accounts of the Company at———————————– along with registered office of the company with effect from –/–/—-.
RESOLVED FURTHER THAT Mr. /Ms. ———–, director/CS/CFO of the Company be and is hereby authorized to file the necessary documents/ form(s) with the ROC and to do all such acts, deeds, matters and things as may be necessary, desirable, proper or expedient for the purpose of giving effect to this resolution and for matters connected therewith or incidental thereto.”
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