Statutory books

From CEOpedia | Management online

Statutory books are the accounting books, which are kept by the Companies Act [1]. Statutory books have been established under the Indian Companies Act [2].

Enties in statutory books should reflect the details in the Companies Registration Office and in the share purchase contract [3].

The task of statutory books

Statutory books must show the company's transactions and explain them, accurately disclose the company's financial situation at a particular time and give directors the opportunity to ensure that all accounts prepared in this way are in line with the provisions of the act [4].

Keeping of statutory books

The company secretary bears full responsibility for maintaining the statutory books and registers [5].

The statutory books are open to public inspection, they should be available during business hours. Copies of statutory books must be provided on demand [6].

Contents of a company's statutory

The typical contents of a company is a statutory book are [7]:

  • Register of shareholders,
  • Register of debenture holders,
  • Register of company directors and secretaries,
  • Company's books of account,
  • Minutes of General Meetings,
  • Minutes of board meetings,
  • Register of people eith significant control (PSC register)

Examples of Statutory books

  • Ledger: A ledger is a book that records all financial transactions that occur within a business. It is the primary accounting record of a business and contains all income, expenses, and asset information.
  • Cash Book: A Cash Book is a record of all cash receipts and payments, including bank deposits and withdrawals. It is used to track cash flow in a business and provides an accurate record of all financial transactions.
  • Journal: A journal is a book that records financial transactions as they occur. It is used to track the flow of money in and out of a business, as well as to document receipts, payments, and other transactions.
  • Balance Sheet: A Balance Sheet is a financial statement that lists a company's assets, liabilities, and equity. It is used to assess the financial health of a business by showing how much it owns, owes, and is worth.
  • Income Statement: An Income Statement is a financial statement that shows a company's revenues, expenses, and profits over a certain period of time. It is used to assess the financial performance of a business and to gauge its profitability.

Advantages of Statutory books

The Statutory books are necessary for any company to comply with the Companies Act, and they have many advantages. Below is a list of the advantages that Statutory books offer:

  • They provide a comprehensive record of all financial transactions conducted by the company, making it easier to track the company's performance and ensure compliance with the law.
  • They enable the company to create accurate financial statements and reports, which can be used to assess the financial health of the company.
  • They help to ensure that all taxes are paid in full and on time, as well as any other payments that are due.
  • They provide reliable and up-to-date information about the company's assets and liabilities, enabling the company to make informed decisions about investments and other activities.
  • They are useful for auditing purposes, as they provide evidence of the company's financial activities and can be used to check for any discrepancies.
  • They provide a secure record of the company's activities, offering protection against any potential legal or financial disputes.

Limitations of Statutory books

Statutory books are important for companies to maintain their financial records as per the Companies Act. However, there are certain limitations associated with them which include:

  • Time consuming - Statutory books can be very time consuming to maintain as the Companies Act requires a large amount of detailed information from the company. This can be a burden on the company’s resources and significantly reduce their efficiency.
  • Inflexibility - Statutory books are also often inflexible, meaning that it is difficult to make changes when needed or to adapt the books to new circumstances. This can make it difficult to react to changes in the market or to potential opportunities.
  • Costs - Maintaining statutory books can also be expensive, as the company needs to hire professional accountants to ensure that their books are accurate and up-to-date. This can be a significant drain on company resources.
  • Errors - With complex books, it is also easy to make mistakes or to overlook important details. This can lead to costly errors and mistakes in the financial records, which can lead to serious consequences.

Other approaches related to Statutory books

Statutory books are the accounting books which are kept by the Companies Act. Other approaches related to statutory books include:

  • Maintaining a ledger: This is a record of all the financial transactions, including income, expenses and payments, undertaken by a business.
  • Keeping a cash book: This is a record of all the cash received and paid out by the business.
  • Recording sales and purchases: This is a record of all the sales and purchases made by the business and the associated amounts.
  • Tracking inventory: This is a record of all the goods and materials held in stock by the business and the associated costs.
  • Preparing financial statements: This is a summary of the financial position of the business, including the income statement, balance sheet, and statement of cash flows.

In summary, statutory books are the accounting books kept by the Companies Act. Other approaches related to statutory books include maintaining a ledger, keeping a cash book, recording sales and purchases, tracking inventory, and preparing financial statements.


  1. Law J., Owen G., 2010, p.397
  2. Kumar A., Sharma R., 1998, p.347
  3. Cox J., 2012, p.151
  4. Law J., Owen G., 2010, p.397
  5. Clayton P., 2006, p.88
  6. Ramsey V., Minogue., Baster J., O'Reilly M., 2007, p.243
  7. Beckers Professional Education, 2017 , p.15

Statutory booksrecommended articles
Closing entriesAbbreviated accountsClosing the accountsDeposits in transitOpening entriesSubsidiary accountNominal accountNominal ledgerAccounting documents


Author: Anna Lipowiecka-Migdał