ABC Ltd. is engaged in the manufacturing of automobiles. It has a Board of Directors comprising of 5 members, including a Managing Director, a Whole-Time Director in charge of finance, and a Chief Financial Officer. Duri
CS Executive · Company Law · PYQS · December 2024
ABC Ltd. is engaged in the manufacturing of automobiles. It has a Board of Directors comprising of 5 members, including a Managing Director, a Whole-Time Director in charge of finance, and a Chief Financial Officer. During a recent audit, it was discovered that the company's books of accounts were not maintained properly. There were discrepancies in inventory valuation, and certain transactions were not recorded accurately. The auditors pointed out that the financial statements prepared were not disclosing a true and fair view of the company's financial position. Identify the persons who could be held responsible for the irregularities in the maintenance of books of accounts in ABC Ltd. and the penalty for which they may be liable as per the provisions of the Companies Act, 2013.
Answer & Explanation:
According to section 128(6) of the Companies Act, 2013, the following persons are responsible to take all reasonable steps to secure compliance by the company with the requirement of maintenance of books of accounts etc. Managing Director, Whole-Time Director, in charge of finance Chief Financial Officer; or Any other person of a company charged by the Board with duty of complying with provisions of section 128. Penalty In case the aforementioned persons referred to in Section 128(6) of the Act contravene such provisions, they shall in respect of each offence, be punishable shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees
Topics: Accounts of Companies
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