Maintenance of Books of Accounts at place other than Registered Office

According to section 2(13), Companies act 2013, ‘Books of Accounts’ include

1. All sums of money received and expended by a company and matters in relation to which the receipts and expenditure takes place;

2. All sales and purchase of goods and services by the company;

3. The assets and liabilities of the company;

4. It also includes in case of company engaged in production, processing, manufacturing or other mining activities, such particulars relating to utilization of material or labour or other items of cost 

Following are the features of proper books of accounts

> It must be kept on accrual basis and double entry system of accounting [Section 128(1)]

> It gives true and fair view of the state of the affairs of the company [Section 128(1)]

> It explains the transaction effected both at registered office and its branch, if any [Section 128(1)]

> Every company shall prepare and keeps its books of accounts at its register office or at any other place as Board of Directors may decide [Section 128(1)]

> It should be preserve for atleast 8 financial years immediately preceding  financial year [section 128(5)]

Person responsible for maintenance of Books of Accounts [Section 128(6)]

1. Managing Director,

2. Whole-Time Director in charge of finance,

3. Chief Financial Officer, or,

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

Accounts of Branch office [Section 128(2)]

> Every company which has a branch office in India or outside India has to keep at its office the proper books of accounts relating to the transactions effected at the branch

> The branch office has to send the summarized returns periodically to its registered office or such office where the books of accounts are maintained

Procedure to keep Company Books and Records at Place other than Registered Office [Rule 2A-Companies (Accounts) Rules,2014]

1. Call Board Meeting and pass the resolution for maintaining Company Books and Records at other place than ROC

2. File eform AOC-5 within 7 days of passing of board resolution with ROC along with copy of Board Resolution as an attachment.

Penalty for Non-Compliance with Section 128

1. Imprisonment upto one year, or,

2. Minimum fine of INR 50,000 and maximum fine of INR 5,00,000., or,

3. With both