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Books of Accounts kept at a place other than Registered office. Some FAQs
Books of Accounts kept at a place other than Registered office. Some FAQs
Books of accounts are required to be kept at the registered office of the company. But most of the times, mostly in the cases of private companies, books of accounts are kept at a place other than the registered office. This may invite legal consequences, penalties and inconvenience to the users of such books of accounts such as stakeholders, tax authorities etc. Here are some FAQs on how to maintain books of accounts at the proper location.
What is the proper way of Maintenance of Books of Accounts by the company?
According to the section 128 of the Companies act, every company shall keep the books of account and other relevant books and papers and financial statement for every financial year:
1)At its registered office
2)On accrual basis
3) Based on double entry system of book-keeping
4) in hard copy or in electronic mode (In case of records in electronic mode, company shall intimate name of service provider, its IP address & location, address (if on cloud) to RoC on an annual basis at the time of filing of financial statement)
But, what if the books of accounts are maintained at a place other than the registered office?
Most of the private companies which are registered now a days keep their registered office at their residence to receive communication from stakeholders/ tax jurisdiction etc. However, since the place of business is different, it is not practical for the company to keep all its books of accounts at such place.
So, what does the company do?
The company can choose any one out of these three procedures:
1) change its registered office to the present place of business where books of accounts are actually maintained, or
2) keep its books of accounts and records at actual registered office only, or
3) Report the other address in India where books of accounts are maintained by intimating the ROC
Reporting the RoC on the change of address is the most convenient one among these three.
How to intimate the ROC on the change of address?
The company must file and upload form AOC-5 mentioning the full address of the new place of keeping books of accounts within 7 days of decision made by the board to keep the books of accounts at any other place in India.
Is their any punishment for non compliance?
Yes, keeping books of accounts at a place other than its registered office without any intimation to the RoC is considered a serious offence Non-compliance can result into heavy monetary penalty as well as imprisonment of Directors/MD/CFO:
1) MD/WTD/CFO/Other responsible person can be imprisoned for a period upto 1 year, or
2) Minimum fine of INR 50,000 (Maximum INR 500,000), or
3) Both
