Skip to content

CA Intermediate · Corporate and Other Laws · Accounts of Companies

Mahadev Foods Ltd, a public company, was incorporated in 2015. A shareholder asks how long the company must preserve its books of account together with the vouchers, counting from the end of the financial year to which they relate, in the usual case where no fraud investigation is pending. What is the correct period under the Companies Act, 2013?

The books of account and related vouchers must be preserved for at least eight financial years immediately preceding the current financial year, or from incorporation if the company is younger. A longer retention applies only where an investigation has been ordered for the relevant period.

  1. AThree years
  2. BEight yearsCorrect
  3. CFifteen years
  4. DPermanently, without any time limit

Explanation

The Act requires books of account and relevant papers to be kept for not less than eight financial years immediately preceding the current year. Where the company existed for a shorter time, they are kept from incorporation. Where an investigation has been ordered, the books related to the period must be kept until the investigation is complete, which is a special case and not the usual one here.

Did you get it right without looking?

One question tells you little. A timed set on Accounts of Companies shows your real accuracy, how long you take and where you lose marks.

Practise Accounts of CompaniesFree diagnostic mock

More Accounts of Companies questions