Section 136 of the Companies Act, 2013
Here is a detailed explanation of Section 136 of the Companies Act, 2013:
📘 Section 136 – Right of Member to Copies of Audited Financial Statement
This section ensures that the members (shareholders) of a company get timely access to the audited financial statements and related documents before the Annual General Meeting (AGM).
🧾 Key Provisions of Section 136
1. Circulation of Financial Statements
Every company must:
Send to every member, debenture trustee, and other entitled persons:
Audited financial statements (including consolidated financials, if any),
Board’s Report, and
Auditor’s Report
2. Time Limit for Sending
These documents must be sent at least 21 days before the date of the AGM (in physical or electronic mode, as opted by the member).
3. Listed Companies – Website Upload
Every listed company must also:
Place these documents on its website, if any,
Ensure they remain accessible for inspection and download.
4. Right to Inspection
All members, and
Debenture trustees
have the right to inspect the financial statements at the company’s registered office during business hours.
5. In case of subsidiaries
Where a company has one or more subsidiaries:
The holding company must place the financials of each subsidiary on its website.
On request by a shareholder, hard copies of such documents must be provided free of cost.
⚠️ Penalty for Non-Compliance
If the company fails to comply:
Company and every officer in default is liable to a penalty of ₹25,000.
✅ Purpose of Section 136
To promote transparency,
To give shareholders sufficient time to review financial information before the AGM,
To enable informed decision-making during meetings.
📄 Summary Table
| Requirement | Details |
|---|---|
| Who must receive documents | Members, debenture trustees |
| What documents | Audited financials, Board Report, Auditor Report |
| When to send | Minimum 21 days before AGM |
| Website upload | Mandatory for listed companies |
| Penalty for default | ₹25,000 (company + officer in default) |
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