Wednesday 21 January 2015

Maintaining Books of accounts at Place other than Registered Office- Legal Provision


Now-a-days, almost all the private limited companies have directors’ residences or consultants’ offices as its registered office address for receiving all communications from stakeholders/Income-tax jurisdiction etc. However the actual place of business is a place different from registered office where all business activities are carried on. Entire books of accounts and records are also kept at
actual place of business. As per new Companies Act, 2013, if a company maintains its books of accounts at any other place, the same should be reported to RoC by way of filing of Form AOC-5 (Earlier it was Form 23AA under Companies Act, 1956). Non-compliance can result into heavy monetary penalty as well as imprisonment of Directors/MD/CFO. As per Sec. 128 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 as amended from time to time: A company shall keep books of accounts, relevant books and papers and financial statements at its registered office only Books must be kept on accrual basis and according to double entry system of accounting It can be in hard copy or electronic mode In case of records in electronic mode, company shall intimate name of service provider, it’s IP address & location, address (if on cloud) to RoC on an annual basis at the time of filing of financial statement Any or all such accounting records may also be kept at any other place in India as decided by BoD Form AOC-5 must be filed mentioning the full address of place within 7 days of decision made by BoD to keep the books of accounts at any other place in India alongwith copy of board resolution as an attachment. The form is not required to be digitally signed by practising CA/CS/CMA. (Kindly note that proof of address where books are kept is not required to be attached) In case of Branches (in or outside India), books can be kept at branch office only provided summarised returns are sent to the registered office at regular intervals (On a quarterly basis in case of Foreign Branches based outside India) Books alongwith vouchers must be kept in good order for 8 years immediately preceeding the relevant year. Eg. in the running FY 2014-15, the company must keep its records from FY 2006-07 to FY 2013-14 (Central Government may require for keeping books of longer period if investigation has been ordered) Penalty for non-compliance of above provision MD/WTD/CFO/Other responsible person can be imprisoned for a period upto 1 year, or Minimum fine of INR 50,000 (Maximum INR 500,000), or Both Therefore, all companies which maintain books of accounts at any place in India other than registered office shall comply with any of the following option: change its registered office to the present place of business where books of accounts are actually maintained, or keep its books of accounts and records at actual registered office only, or report the other address in India where books of accounts are maintained by filing Form AOC-5 at the earliest.

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