Overview
Every business entity registered under Indian law is legally required to maintain specific statutory records, registers and documents as per applicable Acts and regulations. These records act as official proof of compliance, safeguard the organization in case of disputes or audits and ensure transparency in operations.
Statutory record maintenance is not just a good practice — it is a legal obligation for companies, LLPs, partnerships and other registered entities. Failure to maintain these records accurately and in the prescribed format can lead to monetary penalties, prosecution, and loss of business credibility.
Why
- Legal Compliance – Helps meet the requirements set under the Companies Act, 2013, LLP Act, Income Tax Act, GST law, and other applicable legislation.
- Audit & Inspection Readiness – Keeps the business prepared for statutory audits, government inspections, and due diligence processes.
- Evidence in Legal Disputes – Serves as legal proof in case of disputes, litigation, or contractual disagreements.
- Transparency & Governance – Enhances corporate governance by documenting decisions, transactions, and changes in the organization.
- Avoiding Penalties – Prevents fines and legal action arising from non-compliance.
Key Statutory Records to be Maintained
For Companies (as per Companies Act, 2013):
- Register of Members (Sec. 88)
- Register of Directors & Key Managerial Personnel (Sec. 170)
- Register of Charges (Sec. 85)
- Minutes Book for Board Meetings & General Meetings (Sec. 118)
- Register of Investments (Sec. 186)
- Register of Loans, Guarantees & Security (Sec. 186)
- Books of Accounts and Financial Statements (Sec. 128 — to be preserved for 8 years)
- Register of Contracts and Arrangements (Sec. 189)
For LLPs (as per LLP Act, 2008):
- LLP Agreement and amendments
- Register of Partners
- Statement of Accounts & Solvency (Form 8)
- Annual Return (Form 11)
- Minutes of Decisions/Resolutions
- Books of Accounts and related records
For Other Entities:
- GST Records – Invoices, Returns, Input Tax Credit details (Sec. 35 & 36 of CGST Act — retain for 6 years from the due date of filing annual return)
- Income Tax Records – TDS records, Form 26AS, Audit Reports (retain for 6–10 years depending on reopening provisions under Sec. 148 & 149)
- Labour Law Registers – Wages, Attendance, Leave Records, PF & ESI records (varies by Central/State rules; some registers consolidated under Ease of Compliance)
- Licenses and Permits
- Environmental and Industry – specific Compliance Records
Benefits of Maintaining Statutory Records
- Ensures Smooth Operations – Prevents compliance disruptions that can halt business activities.
- Enhances Business Reputation – Demonstrates transparency and good governance to stakeholders, banks and investors.
- Facilitates Business Transactions – Eases mergers, acquisitions, and funding processes by having ready documentation.
- Reduces Legal Risks – Minimizes chances of disputes, penalties, or criminal liability for directors/partners.
- Improves Decision-Making – Provides accurate and up-to-date information for management and strategic planning.
- Supports Regulatory Relationships – Builds trust with government bodies through consistent compliance.
Format & Mode of Maintenance
- Physical Records – Maintained in bound books or prescribed formats.
- Electronic Records – Permitted under Section 128 of the Companies Act, 2013, provided they are in a readable format, secure, backed up, and protected from tampering.
- Retention Periods – Vary by law:
- Companies Act: 8 years for books of account.
- GST: 6 years from the due date of filing annual return.
- Income Tax: 6–10 years depending on provisions for reopening assessment.
- Labour Laws: As per specific state/central rules.
Consequences of non-maintenance
- Monetary penalties on the company/LLP and officers in default.
- Disqualification of directors in severe cases.
- Legal action by regulatory authorities.
- Negative impact on investor trust and market reputation.
FAQs
Statutory records are legally mandated under specific Acts, such as registers, minutes books, and compliance documents. General business records include operational files like marketing plans or customer databases, which are not legally required.
Yes. While both must maintain books of accounts, meeting records, and compliance registers, the exact list, format, and filing requirements differ under the Companies Act for companies and the LLP Act for LLPs.
Yes, provided the storage system meets legal requirements for accessibility, data integrity, security and backup, as per MCA guidelines.
Absolutely. Even if the company has minimal operations or revenue, statutory records must be maintained from the date of incorporation to avoid penalties.
Certain registers (e.g., Register of Members, Register of Charges) and minutes of general meetings can be inspected by members during business hours. Some records are also open to inspection by creditors, regulators, and in some cases, the public.
Immediately after any change or event, such as appointment of a director, issue of shares, or passing of a board resolution.
Penalties vary depending on the law breached, but they can include monetary fines, disqualification of directors and even prosecution in severe cases.
Not always. Some laws require certain records to be maintained in physical format even if a digital version is kept. Best practice is to maintain both.
Not all statutory records require notarization. However, certain documents (e.g., board resolutions or agreements filed with government authorities) may require certification by a Company Secretary, Chartered Accountant, or cost accountant.
A professional service provider ensures that registers and documents are maintained in the correct format, updated on time and compliant with the latest legal provisions, reducing the risk of penalties and saving management time.
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