Inspection of Books of Accounts [Sec. 128(3) & (4)]
## Section 128(3) & (4) — Right of Inspection
### A. Where BoA are kept in India
Open for inspection at the registered office (or other place u/s 128(1) proviso) by any director;
During business hours;
No Power of Attorney (POA) — director must inspect personally (an authorised representative cannot inspect on his behalf in respect of the company's own books).
### B. Where BoA are kept outside India (Foreign Subsidiary)
A director makes a request to the company in India;
The company must produce the financial information sought within 15 days of the request.
### Inspection of Subsidiary's Books
Inspection of books of accounts of a subsidiary company can be done only by a person authorised by a resolution of the Board of the holding company.
Illustration:
> RIL (Holding) → Reliance Jio (Subsidiary)
> A director of RIL cannot directly walk into Jio to inspect books.
> A Board Resolution of RIL must authorise the director (or other person) to inspect Jio's books.
### Duty to Assist [Sec. 128(4)]
Where inspection is being made under Sec. 128, the officers and employees of the company shall provide all assistance to the director(s) or other authorised person.
Worked example
### Example 1
Q. Mr. A, a director of H Ltd., wants to inspect the books of its subsidiary S Ltd. He proposes to send his Chartered Accountant on his behalf. Is this permitted?
A. No. Inspection of a subsidiary's books can be made only by a person authorised by a Board Resolution of the holding company. Mr. A's personal authorisation to his CA is not sufficient — H Ltd.'s Board must pass a resolution naming such authorised person.
### Example 2
Q. A director seeks information from BoA of a foreign branch kept abroad. Within what period must the company comply?
A. The company must produce the requested financial information within 15 days of receipt of the request.
⚠️ Common exam mistakes
Allowing a director's POA holder to inspect company books — not permitted; only the director personally.
Saying any director of the holding company can inspect subsidiary's books without authorisation — a Board Resolution of holding company is mandatory.
Quoting the response period for foreign-kept books as 7 days — the correct period is 15 days.
Bare-Act text Sec. 128(3) & (4) · Companies Act, 2013 read with Rule 4 of Companies (Accounts) Rules, 2014 · click to expand
Section 128(3): The books of account and other books and papers maintained by the company within India shall be open for inspection at the registered office of the company or at such other place in India by any director during business hours, and in the case of financial information, if any, maintained outside the country, copies of such financial information shall be maintained and produced for inspection by any director subject to such conditions as may be prescribed.
Section 128(4): Where an inspection is made under sub-section (3), the officers and other employees of the company shall give to the person making such inspection all assistance in connection with the inspection which the company may reasonably be expected to give.