Registers - Proper maintenance of registers by companies - Companies Law - Letter: No. 2/18/60-PR,

Circular Letter: No. 2/18/60-PR, dated 27-10-1960. Subject:- Registers - Proper maintenance of registers by companies The Act enjoins every company generally to maintain inter alia certain registers at its registered office in the form (where prescribed) and with the details and particulars specified in the relevant sections, e.g., sections 49(7), 143, 150, 152, 158(2), 301, 303, 307, 356, 357, 358, 359, 360 and 372(5)/(8). Default in the maintenance of some of these statutory registers on the part of the company and its management has been made punishable with fine or imprisonment or with both. Most of these registers are open to inspection by the members or any other persons, as the case may be. It will, therefore, be appreciated that it is essential for the company to maintain the registers properly and with all relevant particulars so that the purpose for which they are intended is adequately fulfilled. This Department has, however, lately come across a few cases from which it feels that the purposes underlying the maintenance of the various records prescribed by law have not been adequately appreciated by some companies and registers are maintained in a way that is incapable of serving the purpose for which they are intended. For instance, in the case of one important company, in regard to the register of contracts under section 301, it was noticed that the register did not contain columns for all specified particulars and that the entries made in it fell very much short of the requirements of sub-sections (1) to (3) of the said section. No entries regarding the names of directors, voting for and against the contract or arrangement and those remaining neutral were made in respect of any of the contract nor were any columns provided in the register for the purpose. No entries were also found in the register regarding the particulars of the bodies corporate and firms of which notice had been given by each director under sub-section (3) of section 299. Under the column bearing the heading Principal terms and conditions , instead of the relevant particulars of contract or arrangement as such, only the number of each bill issued by the company in the course of the contract or arrangement was found to be entered. It is likely that in cluttering up a register in the aforesaid manner, the really material terms and conditions of contract and arrangement will tend to get ignored and the purpose underlying the maintenance of such a register defeated. This Department accordingly considers that in complying with the statutory requirements companies should duly bear in mind the specific provisions of the law in regard to the maintenance of the various registers mentioned in the relevant provisions and arrange to maintain them in the proper manner.