Maintenance of books of accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2016 A private company- newly formed, doesnot have much transaction in india and therefore no employees. So the company wishes to maintain books of account in US, where they have group companies but not branches of the indian company. Here books of account of transaction effected in india is talked about.

Kumud prasad

Kumud prasad (Expert)
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08 December 2016 Read second proviso of Sec.128 of Companies ACT,2013

Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2016 I have read..
1. Physically it should be at registered office or such other place, as registered
2. electronically can be maintained provided its server is in india
My confusion as to whether transaction in india, can ne maintained electronically outside india

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Querist : Anonymous

Querist : Anonymous (Querist)

Kumud prasad

Kumud prasad (Expert)
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08 December 2016 LAW IS SILENT IN THIS CASE

AS PER MY VIEW YES YOU CAN SUBJECT TO THE CONDITION THAT BOOKS OF ACCOUNTS CAN BE ACCESSIBLE FROM INDIA.

Regards
CS Kumud

Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2016 Thanks for response
One last query- whether physical documents for transaction effected in india, can be maintained outside india, provided it is periodically sent to Indian company

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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03 August 2024 For a newly formed private company in India with limited transactions, maintaining books of accounts can be managed efficiently, but there are specific legal requirements that must be adhered to. Here’s how you can handle the maintenance of books of accounts and documentation under Indian law:

### **1. Physical and Electronic Maintenance of Books of Accounts:**

**Physical Location of Books of Accounts:**
- **Registered Office Requirement:** Under the Companies Act, 2013, books of accounts must be maintained at the registered office of the company or at such other place as the Board of Directors may decide, which should be within India.

**Section 128(1) of the Companies Act, 2013:**
- States that the books of accounts and other relevant documents must be kept at the registered office of the company, or at some other place in India as determined by the Board.

**Electronic Maintenance:**
- **Server Location:** According to the Companies Act and related regulations, the maintenance of books of accounts electronically is permissible as long as the server is in India. This ensures compliance with the legal requirement for the physical presence of records within the country.

### **2. Maintenance of Physical Documents:**

**For Transactions in India:**
- **Physical Documentation:** Physical documents related to transactions in India must be maintained at the registered office in India. This is necessary to comply with the requirements under Indian law, which mandates that the physical records be accessible in India.

**Periodic Transfer:**
- **Outside India Maintenance:** While electronic records can be maintained outside India, physical documents related to transactions in India should not be kept outside India. However, it is permissible to keep them outside India if they are periodically sent to the registered office in India for proper maintenance and compliance.

### **Summary:**

1. **Books of Accounts:**
- **Physical Maintenance:** Must be kept at the registered office or at another place in India as decided by the Board.
- **Electronic Maintenance:** Allowed if the server is located in India.

2. **Physical Documents:**
- **Transactions in India:** Physical documents related to transactions in India must be kept in India, at the registered office or a designated location within the country. It is not permissible to maintain these documents solely outside India, even if they are periodically sent to the Indian office.

**Recommendations:**

- **Consult with a Legal Expert:** Ensure compliance with Indian laws and regulations by consulting with a legal expert or company secretary familiar with the Companies Act, 2013.
- **Regular Updates:** Maintain regular updates and reviews of your records and compliance status to ensure adherence to legal requirements.

By adhering to these guidelines, you can ensure that your company remains compliant with Indian regulatory requirements while effectively managing its accounting and documentation processes.