A company registered under the Companies Act has to maintain certain prescribed registers and records. Non-compliance of record-keeping invites penal action against the company and its directors.
Important Registers and Records
In order to ensure timely and systematic compliance with statutory and other requirements, an incorporated company should maintain the following records, registers and stationery:
Register of members
This register contains the details of members such as name, address, occupation, date on which he/she becomes a shareholder of the company, the number of shares held by each member and the amount paid or payable for the shares.
Register of Directors
This register contains the details of the company directors, managing directors, secretaries, etc. including their, name, father's name, address, nationality, occupation, date of birth, etc.
Register of Contract
This register contains the details of all contracts entered into by the company in which its directors are interested.
Register of Directors Shareholding
This register contains information such as the number of shares held by directors in the company, in the company's subsidiary or holding companies, etc.
Register of Charges
This register contains the details of charges on the company's movable and immovable properties. Details such as the date of creation or modification of charge, amount of charge, short description of the property charged, etc. must be recorded in this register.
Minutes of Meetings - Boards of Directors and Members
The decision-making process in a company is facilitated through meetings of the Boards of Directors and its members. The minutes of directors' and members' meetings should be recorded and signed by the Chairman of Meetings from time to time.
Share Certificate
A share certificate is documentary proof of shareholding in a company. The company issues share certificates to subscribers of the Memorandum of Association upon receipt of subscription money as agreed in the Memorandum.
Moreover, if a company issues additional shares, it is required to issue share certificates to the shareholder in accordance with every new allotment. The company will, within two months of allotment of shares, have to deliver the share certificate to shareholders.
Share certificates should be issued under the authority of a Board resolution and should be signed by at least two directors and an authorized signatory with the common seal of the company affixed on the certificate. Stamp duty as prescribed by the respective state's stamp duty rules has to be paid for the share certificates.
Common Seal
Under Companies Act, 2013, Common Seal is optional for a Company. The Company can choose to have a common seal or not.
A common seal is the designated official seal used by the company to validate actions/transactions made in the name of the company. The common seal should be used under the authority of the Board of Directors and its use must be witnessed by directors as stipulated in the Articles of Association of the company. The common seal is used to validate the Share certificates issued by the company and Contracts and deeds executed by the company.