Definition of Statutory Books
What Are Statutory Books?
Statutory Books refer to the mandatory records that a company is required to maintain under the Companies Act. These books must reveal and clarify the company’s financial transactions, giving a precise snapshot of its financial standing. They should assist directors in ensuring compliance with the act during the preparation of company accounts. Statutory Books include daily entries of all received and expended money, records of assets and liabilities, and statements of stockholding where applicable.
Purpose
The primary purpose of maintaining Statutory Books is to ensure transparency and accuracy in financial record-keeping. This practice helps auditor verification during audits and guides directors in fulfilling statutory obligations.
Examples of Statutory Books
- Minute Books: Record discussions and decisions taken during shareholders’ and directors’ meetings.
- Register of Members: Contains details of all shareholders.
- Register of Directors and Secretaries: Lists the names and addresses of all directors and company secretaries.
- Register of Charges: Documents any charges secured against the company’s assets.
- Registers of Transfers and Allotments: Keep track of share transfers and allotments.
Frequently Asked Questions (FAQs)
How long must a company keep its Statutory Books?
Companies are typically required to maintain their Statutory Books for at least seven years after the date of the relevant transactions.
Who can inspect the Statutory Books?
Generally, shareholders or members of the company can inspect the Statutory Books. In some cases, creditors may also have access.
What happens if a company fails to maintain Statutory Books?
Non-compliance with maintaining Statutory Books can lead to legal penalties, fines, and difficulties in financial auditing.
Are electronic records allowed for Statutory Books?
Yes, electronic records are permissible, but the format must be accessible and compliant with the required legal standards.
Can Statutory Books be updated manually?
Yes, but proper controls must be in place to ensure accuracy and prevent unauthorized access or alterations.
Related Terms with Definitions
Books of Account
The records detailing all financial transactions and the company’s financial position, required to be kept by the Companies Act.
Proper Accounting Records
Records that comprehensively document the financial state and transactions of a business, proving compliance with accounting standards and legal requirements.
Register of Members
A statutory book containing the names, addresses, and shareholding details of all shareholders of a company.
Audit Trail
A chronological set of records required to verify the authenticity of financial data and its processing through every step.
Online References
- UK Government - Companies House: Official guide on maintaining statutory books and complying with the Companies Act.
- Institute of Chartered Accountants: Professional guides and resources on statutory compliance.
Suggested Books for Further Studies
- “Accounting and Finance for Non-Specialists” by Peter Atrill and Eddie McLaney - Comprehensive guide covering all fundamental aspects of accounting and finance.
- “Company Law” by Alan Dignam and John Lowry - In-depth book on company law, including obligations about statutory books.
- “Financial Accounting and Reporting” by Barry Elliott and Jamie Elliott - Thorough coverage of accounting standards and statutory books requirements.
- “The Essentials of Finance and Accounting for Nonfinancial Managers” by Edward Fields - Insightful text for understanding the essentials of statutory books and company financials.
Accounting Basics: “Statutory Books” Fundamentals Quiz
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