The first proviso to sub-section (1) of Section 128 of the Companies Act, 2013 requires a company to file a notice in AOC-5 with the Registrar of Companies if it decides to keep all or any of its books of account and other relevant papers at a place other than its registered office.
Under Section 128 of the Companies Act, 2013 requires every company to maintain proper books of account and financial statements at their registered office or any other place in India as decided by the Board of Directors.
The form AOC-5 is a notice to ROC, requires the company to provide details such as the name of the company, the full address of the other place where the books of account will be kept, the financial year to which it applies, and the reasons for keeping the books of account at that place. The form must be filed within 7 days of the Board's decision to keep the books of account at a different place. Along with this form, a copy of the Board resolution wherein a decision regarding the address at which the books of account are to be maintained has been taken must also be attached. This is to ensure that the Registrar of Companies has a record of the decision taken by the Board of Directors regarding the maintenance of books of account at a different address. AOC-5 Form is digitally signed by the Director, Manager, CEO, CFO or Company Secretary.
The company may also keep these books of account in electronic mode and shall remain accessible in India, at all times and Manner of Books of Account to be Kept in Electronic Mode-
»The books of account and other relevant books and papers should be retained in the format in which they were originally generated or received. The information contained in electronic records should remain complete and unaltered.
» The information received from branch offices should not be altered and should be kept in a manner that depicts the original information.
» The electronic records should be capable of being displayed in a legible form.
» The company should have a proper system for storage, retrieval, display or printout of the electronic records, as deemed appropriate by the Audit Committee or the Board.
»The back-up of the electronic books of account and other books and papers, including those maintained outside India, should be kept on servers physically located in India on a daily basis.
» The company should annually in form AOC-4, intimate the Registrar of Companies about the name of the service provider, internet protocol address of the service provider, location of the service provider (if applicable), and the address provided by the service provider in case the books of account and other books and papers are maintained on cloud.
For the purposes of this rule, the expression "electronic mode" includes "electronic form" as defined in clause (r) of sub-section (1) of section 2 of Information Technology Act, 2000 (21 of 2000) and also includes an electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000) and "books of account " shall have the meaning assigned to it under the Act.
Maintain the Records
The books of account of every company shall be preserved for a period of not less than eight financial years immediately preceding the current financial year. If the company has been in existence for less than eight years, then the books of account shall be kept for the entire period of its existence. The books of account shall be kept in good order and shall include vouchers relevant to any entry in the books.
Audit Trail Requirements-
For the financial year commencing on or after the 1st day of April, 2023 onwards, all companies are mandated to use accounting software that records an audit trail of each and every transaction and creates an edit log of each change made in the books of account along with the date when such changes were made. Additionally, the software must ensure that the audit trail cannot be disabled.
This provision is aimed at enhancing transparency and accountability in the financial reporting of companies and to prevent any fraudulent or unauthorized changes in the books of account. By requiring the use of accounting software with these features, the government aims to improve the quality of financial reporting and make it easier for regulators and auditors to detect any irregularities in the books of account.
» In case the company has a branch office in India or outside India, it must maintain proper books of account at the branch office and periodically send summarized returns to the registered office. These books must accurately reflect the company's financial status and transactions for each financial year and must be prepared according to the accrual basis and double-entry system of accounting.
» The books of account must be open for inspection during business hours by any director at the registered office or any other place in India. If any financial information is maintained outside the country, copies of such information must be maintained and produced for inspection subject to the prescribed conditions.
» The books of account for a minimum of eight financial years preceding the current financial year or all preceding years if the company has been in existence for less than eight years, along with relevant vouchers, must be kept in good order. If an investigation has been ordered under Chapter XIV, the Central Government may direct the books of account to be kept for a longer period.
Once the eForm AOC-5 is filed with the Registrar of Companies, it will be processed by the office of the Registrar of Companies (Non STP). The details provided in the form will be verified and checked for accuracy and completeness. If any discrepancies or errors are found, the Registrar may issue a notice to the company for rectification or clarification.
Once the form is processed and accepted, the details will be saved with the Ministry of Corporate Affairs (MCA) database. The information provided in the form will be available for public access through the MCA portal. The company can also access its own information by logging in to the MCA portal using its login credentials. Once an AOC-5 is registered by the authority, an acknowledgement of the same is sent to the user in the form of an email. The email contains details of the AOC-5 that has been registered, including the SRN (Service Request Number) of the form, which is a unique identification number for that particular form. The email also contains the date and time of registration, the name of the company, and other relevant details. This email serves as proof of submission and registration of the e-Form and should be kept safely for future reference. Master data will also get updated with the new address.
The applicable fee for filing AOC-5 form with the Registrar of Companies (ROC) would depend on the authorized capital of the company. The fee structure is as follows:-
in case, book of accounts ae kept at other than registered office place and not intimated to ROC welcome to non-compliance and in that case the designated individual responsible for compliance, such as the Managing Director or CFO, may be held liable for a penalty of up to INR 5 lakhs or imprisonment for a term that may extend up to one year, or both.