Section 128 of the Companies Act, 2013 requires that every company shall prepare and maintain its books of account and other relevant books and papers and financial statements for every financial year, which give a true and fair view of the state of the affair of the company. Almost similar provision is in section 34 of the LLP Act, 2008 concerning LLP
Books to be preserved for 8 Year
A company or an LLP is required to preserve the books of accounts, relevant papers, vouchers and other accounting records, bank statement, invoices, registers etc. until eight years. And in case there is any legal proceeding concerning accounts or tax then records to be preserved until the conclusion of such proceeding.
Punishment for Non-compliance
For any non-compliance of Section 128 of the Companies Act, there is an imprisonment for a term which may extend to one year or with fine which shall not be less than Rs. 50,000/-, but which may extend to Rs.5 lakh or with both. In case of LLP, the penalty for contravention of section 34 is Rs. 25 thousand to 5 lac payable by LLP and for designated partner it is Rs. 10 thousand to 1 lac
Place of Maintaining Account
Book of Account is to be maintained at Registered Office of the company or LLP. The board of directors may decide to keep and maintained the books of account at any other place in India. However, such a decision must be intimated to the ROC in Form No. AOC 5 within seven days. in case of LLP, the books must be maintained at the registered office of the LLP
The primary responsibility for maintaining the books of account is on the Board of Director of the company or the designated partners in case of LLP. However, in case of non-compliance of law, the Managing Director, the whole time director in charge of finance, the Chief Financial Officer of the company and in case of LLP the designated partners are held responsible.
Finalisation of Accounts & Audit
At the end of the financial year, final accounts need to be prepared which results in the profit and loss account and the balance sheet for the fiscal year. The books of account need to signed by two director or designated partners. In case of companies the books must be audited by the statutory auditors of the company and in case of LLP audit is required when turnover crosses 40 Lac