Maintenance of books of accounts

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Rule 3 of Companies (Accounts) Rules, 2014 provides the procedures for the maintenance of books of accounts by the Company. 

Rule 3(1) provides that the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India, so as to be usable for subsequent reference.  The amendment now requires that the books of accounts shall remain accessible in India at all times.

Rule 3(5) provides that there shall be a proper system for storage, retrieval, display or printout of the electronic records as the Audit Committee, if any, or the Board may deem appropriate and such records shall not be disposed of or rendered unusable, unless permitted by law.  The proviso to this rule provides that  the back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a periodical basis.  The amendment requires that the backup of the books of accounts shall be kept in servers physically located in India on a daily basis.

Rule 3(6) provides that the company shall intimate to the Registrar on an annual basis at the time of filing of financial statement-

The amendment adds another aspect to the above which is-

Now it is made mandatory to intimate to the Registrar about the details of the service provider under to whom the Company grants the control the books of accounts in India annually.

Physical verification of registered office

The company shall have a registered office.  At the time of incorporation of a company the details of registered office is to be filed.  Rule 25 of Companies (Incorporation) Rules, 2014 requires the company to file Form INC – 22 for the verification of registered office.  Section 12(9) of Companies Act provides that if the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may cause a physical verification of the registered office of the company in such manner as may be prescribed.

The amendment inserts a new Rule 25B in the said Rules with effect from 18.08.2022, prescribing the procedure of physical verification by the Registrar of Companies.  According to the newly inserted Rule 25B-

Removal of the name of company

Rule 25B(5) provides that if the registered office of the company is found to be not capable of receiving and acknowledging all communications and notices, the Registrar shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register of companies and requesting them to send their representations along with copies of relevant documents, if any, within a period of 30 days from the date of the notice before taking further actions in accordance with the provisions of section 248 of the Act.

For this purpose amendment has been brought in-

  • Form STK – 1 – Notice by Registrar for the removal of name of a company from the Register of Companies;
  • STK – 5 – Public notice calling for objections; and
  • STK – 5A – Public notice.

vide Notification dated 24.08.2022.

Charges

The amendment dated 29.08.2022 inserted a new Rule 13 to Companies (Registration of Charges) Rules, 2014.  According to the new rule, the Form No.CHG-1, CHG-4, CHG-8 and CHG-9 shall be signed by Insolvency resolution professional or resolution professional or liquidator for companies under resolution or liquidation, as the case may be and filed with the Registrar.

The amendment brings new forms for CHG – 1, CHG – 4, CHG – 8 and CHG – 9.

Deposits

The amendment dated 29.08.2022 made changes in Rule 16 of Companies (Acceptance of Deposits) Rules, 2014.  Amended Rule 16 provides that every company to which these rules apply, shall on or before the 30th day of June, of every year, file with the Registrar, a return in Form DPT-3 along with the fee as provided in Companies (Registration Offices and Fees) Rules, 2014 and furnish the information contained therein as on the 31st day of March of that year duly audited by the auditor of the company and declaration to that effect shall be submitted by the auditor in Form DPT-3.

The amendment substituted a new form for DPT – 3 and DPT – 4.

KYC

The amendment dated 29.08.2022 substituted new forms for DIR-3- KYC and DIR-3-KYC-WEB.  In this form, in addition to other particulars, jurisdiction of police station, its phone number and fax number are asked for.

Forms

Nine amended forms for the company i.e. (DIR-3- KYC, KYC e-form), (CHG – 1, CHG – 4, CHG-6, CHG -8, CHG-9) (DPT – 3, DPT – 4) are published for filing in the MCA V3 portal on 01.09.2022.

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