Statutory Registers under the Companies Act

Statutory Registers under the Companies Act
06 November 2019

Statutory Registers under the Companies Act

The Companies Amendment Act 2013 was passed by the Lok Sabha on 18th December 2012 and in the Rajya Sabha on 8th August 2013. It received the Presidential assent on 29th August 2013. The new Companies Act, 2013 replaced the old Companies Act, 1956. The Companies Act, 1956 was although amended many times but it was considered out of date and inadequate with the evolving needs. It took almost 4 years to implement the Companies Act since it was first introduced as a Companies Bill in 2009. It has 470 sections and is divided into 29 chapters. The new law is progressive and forward-looking which promises improved corporate governance norms, enhanced disclosures and transparency, facilitation of responsible entrepreneurship, increased accountability of company management and auditors, protection of interests of investors and many more amendments which has made the Companies Act significantly changed how corporates operate in India. 

According to the Act, for a company to run efficiently and observe statutory requirements, it needs to maintain certain records and registers. Maintaining such records and registers properly are important to fulfil the purpose of complying with the law and requirement to maintain the Statutory Registers arises due to the various applicable provisions of the Companies Act, 2013 and all the various rules that have been framed thereunder. 

What are Statutory Registers?

Statutory Register refers to specific records about a company’s shareholders, directors, and the meetings held. The Companies Act, 2013 (the Act) and the Rules made thereunder (“the Rules”) lay down that every Company incorporated under the Act has to maintain Statutory Registers (“the Registers”). The Registers need to be maintained and updated eventually and should be kept at the Registered Office of the Company. Some of the Registers are required to be kept open for inspection by Directors, Members, Creditors and by other persons. A Company is required to provide the extracts from the Registers, if demanded by Directors, Members, Creditors and by other persons on payment of specified fees. There are various statutory registers are required to be maintained as per the Act but a company shall maintain only those registers which are applicable to them according to the business and transactions. 

The statutory registers that have to be maintained:

1. Register under Section 88

  1. Register of Members: Section 88 (1) of the Companies Act, 2013 and Rule 3 of the Companies (Management and Administration) Rules, 2014 says that every company shall maintain a Register of Members under the format MGT - 1. According to section 94 (1) the Register is required to be kept at the Registered Office of the Company or at any other place where 1/10th of the member resides by passing a special resolution and in section 94 (2) copies of all returns shall be open for inspection by any member, debenture-holder, other security holder or beneficial owner, during business hours without payment of any fees and by any other person on payment of such fees of Rs. 50 per inspection.
  2. Register of Debenture-Holders: Section 88 (2) of the Companies Act and Rule 4 of the Companies (Management and Administration) Rules, 2014 to maintain the register of debenture-holders under the format MGT - 2. According to section 94 (1) the Register is required to be kept at the Registered Office of the Company or at any other place where 1/10th of the member resides by passing a special resolution and in section 94 (2) copies of all returns shall be open for inspection by any member, debenture-holder, other security holder or beneficial owner, during business hours without payment of any fees and by any other person on payment of such fees of Rs. 50 per inspection.
  3. Index of Debenture Holders and other Security Holders: Section 88 (2) of the Companies Act and Rule 6 of the Companies (Management and Administration) Rules, 2014 required to maintain the index of Members and debenture-holders in which serial wise entries shall be made for members and debenture-holders. According to section 94 (1) the Register is required to be kept at the Registered Office of the Company or at any other place where 1/10th of the member resides by passing a special resolution and in section 94 (2) copies of all returns shall be open for inspection by any member, debenture-holder, other security holder or beneficial owner, during business hours without payment of any fees and by any other person on payment of such fees of Rs. 50 per inspection.
  4. Foreign Register of Members, Debenture Holders, Other Security Holders or Beneficial Owners Residing Outside India: Section 88 (4) of the Companies Act and Rule 7 of the Companies (Management and Administration) Rules, 2014 requires to maintain the Index of Members and debenture-holders in which serial wise entries shall be made for members and debenture-holders. According to section 94 (1) the Register is required to be kept at the Registered Office of the Company or at any other place where 1/10th of the member resides by passing a special resolution and in section 94 (2) copies of all returns shall be open for inspection by any member, debenture-holder, other security holder or beneficial owner, during business hours without payment of any fees and by any other person on payment of such fees of Rs. 50 per inspection.
  5. Penalty: Under section 88 (5) of the Companies Act says that, if a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2) of section 88, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 50,000 but which may extend to Rs. 3 Lakh and where the failure is a continuing one, with a further fine which may extend to Rs. 1000 for every day, after the first during which the failure continues.

2. Registers of Renewed & Duplicate Share Certificates.

Section 46 of the Companies Act, 2013 and Rule 6 of the Companies (Share Capital and Debentures) Rules, 2014 requires to maintain the Register of Renewed and Duplicate Share Certificates in format SH - 2. A duplicate share certificate will be issued if it is proved to have been lost or destroyed; or has been defaced, mutilated or torn and is surrendered to the company. The register shall be kept at the registered office of the company or at such other place where the Register of Members is kept and it shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose. Under section 46 (5), If a company with intent to defraud issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the duplicate certificate but which may extend to ten times the face value of such shares or rupees Rs. 10 crores whichever is higher and every officer of the company who is in default shall be liable for action under section 447.

3. Registers of Sweat Equity Shares.

Section 54 of the Companies Act, 2013 and Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014 requires to maintain the Register of Sweat Equity Shares in format SH - 3.The Register of Sweat Equity Shares shall be maintained at the registered office of the company or such other place as the Board may decide. The entries in the register shall be authenticated by the Company Secretary of the company or by any other person authorized by the Board for the purpose.

4. Registers of Employee Stock Option (ESOP)

Section 62 of the Companies Act, 2013 and Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 requires to maintain the Register of Employee Stock Option providing all the details regarding the issue, e.g. Name of the Employees to whom the shares have been allotted, Employee Code, Number of Shares allotted, Lock-in period, if any etc. These registers are required to be kept at the Registered Office of the Company or at any other place authorized by the Board of Directors by passing a Board Resolution.

5. Registers of Securities Bought Back

Section 68 of the Companies Act, 2013 and Rule 17 of the Companies (Share Capital and Debentures) Rules, 2014 requires to maintain the Register of Securities Bought Back in format SH - 10. The register of shares or securities bought-back shall be maintained at the registered office of the company and shall be kept in the custody of the secretary of the company or any other person authorized by the board in this behalf. The entries in the register shall be authenticated by the secretary of the company or by any other person authorized by the Board for the purpose. Under section 68 (11) If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange Board, for the purposes of clause (f) of sub-section (2) of section 68, the company shall be punishable with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs. 3 Lakh and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 years or with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs. 3 Lakh, or with both.

6. Registers of Deposits

Section 73 of the Companies Act, 2013 and Rule 14 of the Companies (Acceptance of Deposits) Rules, 2014 requires to maintain the Register of Deposits providing the details of deposits, interest thereon, tenure etc. The register shall be preserved in good order for a period of not less than eight years from the financial year in which the latest entry is made in the register.

7. Registers of Charges

Section 85 of the Companies Act, 2013 and Rule 10 of the Companies (Registration of Charges) Rules, 2014 requires maintaining the Register of Charges in format CHG - 7.Every company shall keep at its registered office a register of charges and the register of charges and instrument of charges, kept under shall be open for inspection during business hours by any member or creditor without any payment of fees; or by any other person on payment of such fees as may be prescribed, subject to such reasonable restrictions as the company may, by its articles, impose. The register of charges shall be preserved permanently and the instrument creating a charge or modification thereon shall be preserved for a period of eight years from the date of satisfaction of charge by the company.

8. Registers of Directors & Key Managerial Personnel (KMP) And Their Shareholding

Section 170 of the Companies Act, 2013 and Rule 17 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 says, every company shall keep at its registered office a register and a return containing such particulars and documents as may be prescribed, of the directors and the key managerial personnel, shall be filed with the Registrar within 30 days from the appointment of every director and key managerial personnel, as the case may be, and within 30 days of any change taking place. Its penalty is given in Section 172 if a company contravenes any of the provisions of this Chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 50,000 but which may extend to Rs. 5 Lakh.

9. Registers of Loan & Guarantee

Section 186 of the Companies Act, 2013 and Rule 12 of the Companies (Meetings of the Board and its Powers) Rules, 2014 requires to maintain the Register of Loan and Guarantee given, Security provided, Acquisitions made in Format MBP - 2 in which entries shall be made chronologically. The register shall be kept at the registered office of the company and shall be open to inspection at such office, and extracts may be taken therefrom by any member, and copies thereof may be furnished to any member of the company on payment of such fees as may be prescribed. The register shall be kept at the registered office of the company and the register shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose. Under section 186 (13) if a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 5 Lakh and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 2 years and with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 1 Lakh.

10. Registers of Investments of The Company Not Held in Its Own Name

Section 187 of the Companies Act, 2013 and Rule 12 of the Companies (Meetings of the Board and its Powers) Rules, 2014 requires to maintain the Register of Investments by the Company but not held in its own name in Format MBP - 3 in which entries shall be made chronologically. It shall contain the particulars of the investment e.g. shares or other security which is beneficially held by the company along with the reason for not holding it in its name. The Register shall also mention the relation/contract under which the investment is held by the other person. The register shall be kept at the registered office of the company and shall be open to inspection at such office, and extracts may be taken therefrom by any member, and copies thereof may be furnished to any member of the company on payment of such fees as may be prescribed. The register shall be kept at the registered office of the company and the register shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose. Under section 187 (4) If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 25 Lakh and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 6 months or with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 1 Lakh, or with both.

11. Registers of Contracts & Arrangements in Which Directors Are Interested

Section 189 of the Companies Act, 2013 and Rule 16 of the Companies (Meetings of the Board and its Powers) Rules, 2014 requires to maintain the Register of Contracts and Arrangements in which directors are interested, in two parts - Part-A Entries regarding interest of Director in other concerns shall be recorded and in Part-B Disclosure regarding Related Party Transaction Shall be given and shall be in the Format of MBP - 4 shall be kept at the registered office of the company and it shall be open for inspection at such office during business hours and extracts may be taken therefrom, and copies thereof as may be required by any member of the company shall be furnished by the company and extracts from such register to a member of the company on his request, within seven days from the date on which such request is made upon the payment of such fee as may be specified in the articles of the company but not exceeding ten rupees per page. Under section 189 (6), every director who fails to comply with the provisions of this section and the rules made thereunder shall be liable to a penalty of Rs. 25,000.