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Section 128 of the Companies Act, 2013 provides for Maintenance of books of accounts under the new Companies Act.

To give true and fair view of the state of affairs of the company or branch office and to explain its transactions and also specify the place of keeping and period for which such books to be kept by the company. The responsibility for maintenance books of accounts was also fixed by this provision.

 Section 209 of the Companies Act, 1956 and section 128 of the companies act 2013 both deals with same “Books of accounts to be kept by company”.

The significant changes introduce in this section are as follows: –

a) books of accounts may also be kept in electronic form

b) a director of the Company can inspect the books of accounts of the subsidiary, only with the authority of the Board of Directors.

Maintenance of Books of Accounts

To record the specified financial transaction company must have to maintained books of accounts.Maintenance of books of accounts.

It has been specifically provided that –

* such books shall be kept on accrual basis and according to the double entry system of accounting:

* company have to maintain books of accounts at their registered office but if company wants to kept such books of accounts 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 books of accounts must show the sale, purchases of goods, money received and expended and assets and liabilities of the company.

* What is required to be prepared and kept are books of accounts, other relevant books and papers and financial statements. Books of accounts are defined in clause 2(13) , ‘books and papers’ in clause 2(12) and ‘ financial statement’ in Clause 2(40). Both are required to be prepared and kept.

* transaction affected the company’s registered office and any branch must be record in books of accounts that contains papers and financial statements.

* these Records, books, papers and financial statements must relate to any specific financial year only.

* maintenance of books of accounts are compulsory for all like branch office of the company in India or outside India at their particular office. but at the end of the FY all the summarised books of accounts must be send to the registered office or any the place decided by board.

  • Normally all books of accounts are maintained at registered office of the company.

* but in case company want to kept there books of accounts at any other place other than registered office in India than resolution of board of directors are necessary and company shall be required to intimate full address to registrar of companies in 7 days.

* Second proviso to clause 128(1) The maintenance of books of accounts and other books and papers in electronic mode is permitted and is optional.

* Section 148 of The Companies Act, 2013 says that a company engaged in production, processing, manufacturing or mining activity, is also required to maintain particulars relating to utilization of material, labour or other items of cost as the Central Government may prescribe for such class of companies.


 To take all the reasonable steps to secure compliance by the company with the requirement of maintenance of books of accounts etc. shall be: (sub-section 6)

i) Managing Director,

ii) Whole-Time Director, in charge of finance

iii) Chief Financial Officer

iv) Any other person of a company charged by the Board with duty of complying with provisions of section 128.

Penal Provision

In case when these responsible persons mentioned in sub-section 6 are fail to take reasonable steps to secure compliance of this section and thus, contravene such provisions, they shall in respect of each offence be punishable,

  • A minimum penalty of Rs. 50,000 which may extend to Rs. 5 lakhs; or.
  • Imprisonment for a specific period/term which may extend to one year; or.
  • With both of the above punishment, i.e., both fine as well as imprisonment.
CS Deepa Sharma

Author is a associate member of the Institute of Company Secretaries of India (ICSI) and apart from that she holds LLB degree and Master in Commerce degree from Rajasthan University. She is having over 5 years of experience as a Practicing Company Secretary. She is well versed with all the matters related to Company Law and ROC matters, RERA , statutory reporting, Compliance Report and Corporate Governance. She is having good exposure in maintaining secretarial records as prescribed under Companies Act, 2013.

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