Companies Act 1956

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Companies Act 1956:-

    The companies Act 1956  made it compulsory for every company to keep proper set of books 📚 for Recording financial transactions and to prepare its annual statements in the prescribed form at the proper time.

    The Amendment Act, 1988  has  made it obligatory on all companies to maintain accounts on accural basis and according to the Double Entry System of accounting.

   The provisions governing the keeping of books 📚 and publication of final accounts dealt under laid down under secs. 209 to 223, The brief provisions are as follows:


1. Preparation of final Statements :

   Under sec. 210 it has been made compulsory to present the Balance Sheet and profit and loss account, at every annual general meeting. For every financial year one annual general meeting must be held.

   Between two agm 's it shall not exceed fifteen months, however that it may be to eighteen months with special permission with Registrar extended of companies.

   The responsibility for the preparation of final accounts and placing them before the annual general meeting is placed on the directors.

   In the case of companies not carrying on business for profit an income and expenditure account will be prepared instead of profit and loss account.

  If the directors fail to company with the provisions of this section, they are punishable under the provision of company act 1956.


2 Form and contents of profit and loss account and balance sheet:-

   According to sec. 211 every balance sheet and profit and loss account of a company shall give a true and fair view of the state of affairs of the company and further, the Balance Sheet shall be in the form set out in Schedule vl or as near there to as circumstances admit or in such other form as may be approved by the central government either generally or in any particular case.

  The set form for the preparation of Balance Sheet has been given in part l of the Schedule and the requirements for the preparation of the profit and loss account are given in part ll of that Schedule.


3 Disclosure of interest in the subsidiary company:-

     As per sec.212 a company happens to be a holding company, the following documents relating to subsidiary company shall be attached to its balance sheet: (a) a copy of the Balance Sheet a copy of its profit and loss account, (c) a copy of directors report, (d) a copy of the reports of its auditors and (e) a statement of the holding company's interst in the subsidiary.


4 Report:-

  The auditor's report ( including separate, special or supplementary report, if any) and directors report shall be attached to the Balance Sheet of the company.


5 Authentication of Balance Sheet and profit and loss account:-

  As per sec.215 every balance sheet and every profit and loss account of a company shall be signed on behalf of the board of directors by its manager or secretary, if any and by not less than two directors of the company one of whom shall be a managing director where there is one.


6 Filling of account:-

   Under sec, 220 within thirty days of the registrar three copies of balance sheet and profit and loss account and three copies of all documents which are required to be attached with the Balance Sheet.




   

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