Maintenance and
Inspection of documents in electronic form.
Section 120 of the Companies
Act,2013 and Companies (Management and
Administration)Rules,2014 deals with the Maintenance
and Inspection of documents in electronic form.
Any document, record, register, minutes, etc
are -
(a) required to
be kept by a company; or
(b) allowed to
be inspected or copies to be given to any person by a company under this Act,
may be kept or inspected or copies given, as the case may be, in electronic
form.
Applicability:
·
Every listed company or
·
a
company having not less than one
thousand shareholders, debenture holders and other security holders, shall
maintain its records, as required to be maintained under the Act or rules made
there under, in electronic form.
In case
of existing companies, data shall be converted from physical mode to electronic
mode within six months from the date of notification of provisions of
section 120 of the Act.(i.e.,
on or before 1st October 2014)
The records in
electronic form shall be maintained in such
manner as the Board of directors of the company may think fit,
·
the records are maintained in the same formats and in accordance with all
other requirements as provided in the Act or the rules made there under;
·
the information as required under the
provisions of the Act or the rules made there under should be adequately recorded for future reference;
·
the records must be capable of being readable, retrievable and reproducible in printed
form;
·
the records are capable of being dated and signed digitally wherever it
is required under the provisions of the Act or the rules made there under;
·
the records, once dated and signed
digitally, shall not be capable of being
edited or altered;
·
the records shall be capable of being updated, according to the provisions of the Act or
the rules made there under, and the date
of updating shall be capable of being recorded on every updating.
"records”
means any 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
Person responsible for maintenance and
security of electronic records:
·
The Managing Director,
·
Company Secretary or
·
any other director or
·
officer of the company
as
the Board may decide shall be responsible for the maintenance and security of
electronic records.
Responsibility:
The
person who is responsible for the maintenance and security of electronic
records shall-
·
provide adequate protection against unauthorized access,
alteration or tampering of records;
·
ensure against loss of the records as a result of
damage to, or failure of the media
on which the records are maintained;
·
ensure that the signatory of electronic records does not
repudiate the signed record as not genuine;
·
ensure that computer systems, software and hardware are
adequately secured and validated to ensure their accuracy, reliability and
consistent intended performance;
·
ensure that the computer systems can discern invalid and
altered records;
·
ensure that records are accurate, accessible, and
capable of being reproduced for reference later;
·
ensure that the records are at all times capable of being
retrieved to a readable and printable form;
·
ensure that records are kept in a non-rewriteable and
non-erasable format like pdf. version or some other version which cannot be
altered or tampered;
·
ensure that at least one backup, taken at a periodicity
of not exceeding one day, are kept of the updated records kept in electronic
form, every backup is authenticated and dated and such backups shall be
securely kept at such places as may be decided by the Board;
·
limit
the access to the records to the managing director, company secretary
or any other director or officer or persons performing work of the company as
may be authorized by the Board in this behalf;
·
ensure that any reproduction of non-electronic original
records in electronic form is complete, authentic, true and legible when
retrieved;
·
arrange and index the records in a way that permits easy
location, access and retrieval of any particular record; and
·
take necessary steps to ensure security, integrity and confidentiality
of records.
Inspection and copies of records maintained
in electronic form:
Where a company maintains its
records in electronic form, any duty imposed by the Act or rules made there
under –
·
to
make those records available for inspection or
·
to
provide copies of the whole or a part of those records, shall be construed as a
duty to make the records available for inspection in electronic form or
·
to
provide copies of those records containing a clear reproduction of the whole or
part thereof, as the case may be on payment of not exceeding ten rupees per page.
Penalty :
Company
& Officer or such person
|
Fine which may extend
to Rs.5,000/-
|
Continuing
contravention
|
Fine
which may extend to Rs.500/- for
every day
|
Comments:
1. Every listed company and
other prescribed companies has to convert their records from Physical mode to
electronic mode on or before 1st
October 2014.
2. E-governance has been
introduced in the Companies Act,2013 for maintenance and inspection of
company’s statutory records.
3. We need a proper software
to sign the records digitally, which should be safe and secure to use.
4. The company has to find
the reliable software tool from the
market and invest on it, which will increase the maintenance cost.
Disclaimer:
The entire
contents of this document have been prepared on the basis of relevant provisions
and as per the information existing at the time of the preparation. Though
utmost efforts has made to provide authentic information, it is suggested that
to have better understanding kindly cross-check the relevant sections, rules under the
Companies Act,2013
By
M.Kurthalanathan B.Com,ACS,MBL
e-mail
:mknathanacs@gmail.com
Practising Company Secretary
Good write up on records to be maintained in e-form. Records of ur articles too maintained electronically.
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