Maintenance of records, electronically

1. Every Company is required to maintain statutory
recordsin the form of registers, minutes etc.
throughout its life. Companies under the old Act
were maintaining the same in physical form,
however Companies Act, 2013 has changed the
picture totally for listed companies and a company
having not less than 1000 shareholders, debenture
holders and other security holders. Such companies
now have to compulsorily convert all their records
from physical mode to electronic mode till 30
September 2014.
Other companies can choose either to maintain
records in physical or electronic form and if they
choose to maintain it in electronic form, then they
need to follow the prescribed guidelines in Rules.
We have summarised the same in this
Article.(Chapter 7)
What is meant by “records”
Records meansany register, index, agreement,
memorandum, minutes or any other document
required by the Act or the rules made there under
to be kept by a company.
How should the records be maintained in
electronic form?
Records have to be maintained in the same
formats and in accordance with all other
requirements as provided in the Act or rules.
Information shall be adequately recorded for
future reference.
Records must be capable of being readable,
retrievable and reproducible in printed form.
Records are capable of being dated and signed
digitally wherever it is required.
Records, once dated and signed digitally, shall
not be capable of being edited or altered
Records shall be capable of being updated and
the date of updating shall be capable of being
recorded on every updating
Who is responsible for security of electronic
records?
Managing Director, Company Secretary or any
officer of the Company as authorised by the
Board is responsible for security of electronic
records.He should ensure the following:
a) Provide adequate protection against
unauthorized access, alteration or tampering
of records
b) Ensure against loss of the records
c) Ensure that computer systems, software and
hardware are adequately secured
d) Ensure that records are accurate, accessible,
and capable of being reproduced for
reference later
e) Ensure thatrecords are at all times capable of
being retrieved to a readable and printable
form
f) Ensure records are kept in a non-rewriteable
and non-erasable format
g) Ensure that at least one backup, taken at a
periodicity of not exceeding one day and is
authenticated and dated.
Inspection of records in electronic form
Records should be made available for inspection
in electronic form
Wherever copies are to be made available, the
same should be given on payment of not
exceeding Rs. 10 per page
Maintenance of Books of Accounts in electronic
form
Companies need to take care of the following while
maintaining books of accounts in electronic form,
besides the aforementioned:
Shall remain accessible in India
Shall be capable of being displayed in a legible
form
Proper system for storage, retrieval, display or
printout of electronic records
Shall not be disposed of or rendered unusable,
unless permitted by law
Back-up shall be kept in servers physically
located in India on a periodic basis
Company should also intimate ROC annually- Name
of service provider, internet protocol address of
service provider, location ofservice provider, cloud
address(if the books are maintained on cloud).
Maintenance
of Records
Electronically