Un audited balance sheet

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2013 Can a Private Limited Company adopt Unaudited financial statementS in AGM and if adopted what are the consequences???

Querist : Anonymous

Querist : Anonymous (Querist)

05 April 2013 Dear all members please reply to the above query...

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Here’s a clear explanation on whether a Private Limited Company can adopt **Unaudited Financial Statements** in the AGM, and the consequences:

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### Can a Private Limited Company adopt Unaudited Financial Statements in AGM?

**No.**
As per **Section 129 of the Companies Act, 2013**, every company (including Private Limited) is required to prepare and present **audited financial statements** at the Annual General Meeting (AGM).

* The financial statements presented to the AGM must be audited by a **qualified Chartered Accountant** as per **Section 139**.
* Adoption of **unaudited** financial statements is **not legally valid** and violates the provisions of the Companies Act.

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### Consequences of Adopting Unaudited Financial Statements in AGM

1. **Non-compliance with the Companies Act:**

* It is a violation of statutory provisions.
* The company, its officers, and directors can be held responsible.

2. **Penalties and Legal Action:**

* Section 99 and other related provisions empower the Registrar of Companies (ROC) to initiate actions.
* The company and officers may face penalties including fines.

3. **Impact on Stakeholders:**

* Shareholders and creditors rely on audited financials for decision making.
* Adoption of unaudited statements reduces transparency and may erode trust.

4. **Difficulty in Compliance with Other Laws:**

* Tax filings, loan agreements, and other statutory filings require audited financials.
* Adoption of unaudited statements can delay or disrupt these processes.

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### Best Practice:

* Ensure **auditor’s report** is ready well before the AGM.
* Circulate audited financial statements along with the Notice of AGM.
* Only audited financial statements should be adopted in the AGM to comply with law.

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If you want, I can provide sample language for board resolutions or notices related to audited financial statements for AGM. Would that help?

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