Despite the clear regulations in the Companies Act, 1956 as to how every Company should record its transactions, maintain books of account and should submit the approved Financial Statements with the ROC, financial transactions in some closely held companies would be really interesting to note and dealing with the cases of this kind would really be very complicated.  The logic behind the settled accounting principles, the provisions of Companies Act, 1956 dealing with maintenance of accounts, Accounting Standards etc., can very easily be understood. Every Company is expected to be transparent, expected to provide true picture of financial issues to the shareholders and also expected to comply with the regulations with regard to preparation and submission of financial statements with the authorities like ROC in the interests of the Company and also in public interest.  Financial transactions in some closely held Private Companies would really be interesting and we can see routing the Company’s financial transactions through personal Bank Accounts of Directors or the Shareholders. This is why, most of the times, even if there exist procedural irregularities in the Companies with regard to financial issues, those are not taken so seriously at times. For example, there can be going concern which is a closely held company doing business for so many years and if any disputes come among the shareholders suddenly, the adjudicating authority may try to ascertain the true facts in the Company and much emphasis may not be laid on technicalities.  This is a very complicated issue to deal with.  We know the limitations of auditing and we know that it is very easy to find some procedural irregularity in any company with regard to recording financial transactions or maintenance of Books of Account. If these procedural irregularities lead to serious consequences except in exceptional cases, then, many closely held Private Companies may not survive.  It is true that the provisions of Companies Act, 1956 are not directory and mandatory and we know the importance of providing true financial picture of the Company to the shareholders; and as such the consequences of procedural violations can be dealt with strictly as provided under the provisions of the Companies Act, 1956.

I would like to just highlight an observation or noting of in regarding the maintenance of personal Bank Accounts by the shareholders in the Company and the reference is as follows:

Some crimes are straight forward, like speeding. More often, the law is difficult to understand. As a , I’ve gone to law school and deal with the criminal code every day. I’m going to show you how to understand the law you’ve been charged with violating.

Code

The law is made of statutes. These statutes, or code, are made up of elements. If the government fails to prove just one of the elements, its entire case is lost. As a , I’ve had clients charged with “doctor shopping.” The actual code reads:

It is unlawful for any person knowingly and intentionally to acquire or obtain possession of, to procure or attempt to procure the administration of, to obtain a prescription for, to prescribe or dispense to any person known to be attempting to acquire or obtain possession of, or to procure the administration of any controlled substance by misrepresentation or failure by the person to disclose his receiving any controlled substance from another source, fraud, forgery, deception, subterfuge, alteration of a prescription or written order for a controlled substance, or the use of a false name or address;

People who have been injured in the workplace or believe they are suffering from an illness due to adverse working conditions can find themselves in a particularly vulnerable position. They are often hesitant to report their injury or illness to their employer in case this puts their job at risk or their lives at work are made increasingly difficult because they have blamed the employer.

Workers who are not directly employed by a business can also find it more difficult to know what action they can take.

The good news is that whether you are an employee or an agency worker, your employer or employment agency has a legal responsibility to ensure safe working conditions, for example, making sure workers are given adequate protective clothing, footwear and headwear.