Books and accounts under Company Law- A simple notes for Sem II
Section 209 of the Companies Act deals with Books and Accounts. It stipulates that all companies shall keep at
its registered office proper books of accounts showing
-all monies received and spent and matters of receipt and expenditure.
-sales and purchases
-Assets and liabilities
-In case of companies engaged in production, processing, manufacturing , mining etc.,(if such companies
are required by the Central Govt. to include such particulars in the books of accounts), the particulars relating
to utilization of of material or labour or other items of cost .
Books of Accounts, Where kept?:-The Books of Accounts are to be kept at the registered office of the company;
All or any books of Accounts may be kept at SUCH OTHER PLACE in India as the Board of Directors may decide
and within 7 days of such decision, the company has file with the Registrar of Companies (ROC), a notice giving
full address of that place.
Where the company has a branch office, whether in India or outside India, the company shall be deemed to have
Kept the proper books, if proper books of account relating to the transactions effected at the branch office are
Kept at that office and PROPER SUMMARISED RETURNS, made upto dates at intervals of not more than three
months are sent by the branch office to the company at its Registered office or at any other place decided by the
When proper books of Accounts are deemed to be kept?
S.209(3) provides that proper books of accounts are deemed to be kept in respect of matters specified therein,
(i) if there are kept such books as are necessary to give a true and fair view of the state of affairs of the
Company or branch office , as the case may be and to explain its transactions.
(ii) if such books are kept on accrual basis and according to the double entry system of accounting.
Preservation of Books of Accounts:- The books of account of every company relating to a period of not less than
8 Years immediately preceding the current year together with the vouchers relevant to any entry in such books
of accounts shall be preserved in good order. In case of a company incorporated less than eight years before the
current year, the books of accounts for the entire period preceding the current year, together with the vouchers
relevant to the entries therein shall be preserved.
Inspection of Books of Accounts:The books of Account and other books and papers shall be open to inspection by ANY DIRECTOR during business
Hours. The inference is that the shareholders cannot inspect the books of Account. (s.209(4)
The books of account and other books and papers of every company shall be open to inspection DURING BUSINESS
HOURS by(This inspection can be done without giving any previous notice to the company)
(2)by such officer of the Govt. as may be authorized by the central Govt., in this behalf or
(3) such officers of SEBI in respect of share allotment, debenture holders, debenture trust deed etc.[S209A(1)]
Every Auditor of a company shall have a right of access AT ALL TIMES to the books and accounts and vouchers
of the company whether kept at the head office of the company or elsewhere and shall be entitled to require from
the officers of the company such information and explanations as the auditor may think necessary for the
performance of his duties as auditor.
Rights of members to copies of Balance sheet and Profit and loss Accounts:A copy of every Balance sheet (including the profit and loss account, the auditor’s report thereon and every other
document required by law to be annexed or attached to the Balance sheet) which is to be laid before a company in
general meeting has to be sent to every member of the company and to every trustee of the debenture holders
(whether entitled to attend the meeting or not) and to every other persons entitled to attend the meeting, atleast
21 days before the date of the meeting. [S.219(1)]
Copies of Balance sheet, profit loss Account etc., to be filed with the ROC:Three copies of the Balance sheet and profit loss account has to filed with the ROC within 30 days from the date
on which the Balance sheet and Profit and loss account were laid before a company at the AGM or where no
AGM is held in a year, within 30 days WHEN THE AGM SHOULD HAVE BEEN HELD.