1.

Definition of Books of account

[S. 2(13)]

“books of account” includes records maintained in respect of—

• all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place;
• all sales and purchases of goods and services by the company;
• the assets and liabilities of the company; and
• the items of cost as may be prescribed u/s 148 in the case of a Co which belongs to any class of companies specified under that section

2.

Books of account etc. to be kept by the Co

[S. 128(1), (2) &
R. 4(1)]

• Every Co shall prepare and keep books of account and other relevant books and papers and FS for every FY which give a true and fair view of the state of the affairs of the Co
• such books shall be kept -
  • on accrual basis and according to the double entry system of accounting
  • at its registered office
    • may be kept at such other place in India as BoD may decide ⟶ within 7 days the Co shall file with RoC a notice in writing giving the full address of that other place
• If a Co has a branch office in India/outside India ⟶ books of account or other relevant papers of such branch can be kept at such branch and a proper summarized return be sent at registered office (or such other place where books of account are maintained) at quarterly intervals
• books of account or other relevant papers may be kept in electronic mode in prescribed manner

3.

Books of account may be kept in electronic mode

[R. 3]

• Such books of account shall :-
  • remain accessible in India
  • remain complete and unaltered
  • be capable of being displayed in a legible form
• Information received from branch offices shall not be altered
• There shall be a proper system for storage, retrieval, display or print out of the electronic records as AC/BoD may deem fit
• Books of account and other books and papers of the Co may be maintained in electronic mode at a place outside India, if a back-up thereof is kept in servers physically located in India on a periodic basis

• Co shall intimate to RoC on an annual basis at the time of filing of FS -
  • the name of the service provider;
  • the internet protocol address of the service provider;
  • the location of the service provider (wherever applicable);
  • where the books of account and other books and papers are maintained on cloud, such address as provided by the service provider

4.

Open for inspection

[S. 128(3), R. 4(1)]

• Books of account and other books and papers maintained by the Co shall be open for inspection to any director
  • If maintained within India ⟶ at the registered office/such other place in India during business hours
  • If maintained outside India ⟶ copies of quarterly summarized return kept and maintained
• Inspection in respect of any subsidiary ⟶ only by the person authorized by a BR

5.

Preservation of books of account [S. 128(5)]

• Books of account together with the vouchers relevant to entry in such books of account shall be kept in good order by a Co -