HomeBUSINESSCentre steps up record keeping norms of businesses

Centre steps up record keeping norms of businesses


NEW DELHI : The ministry of corporate affairs has stepped up the record keeping requirements of businesses in a bid to make sure that various documents and records are readily available for the authorities to check any time. 

The Companies (Accounts) Fourth Amendment Rules, 2022 brought out by the ministry modified the manner in which books of accounts have to be kept in electronic mode. It said that the books of account and other relevant books and papers maintained in electronic mode should remain accessible in India “at all times”. 

Companies are required to maintain the electronic records the way their audit committees or board of directors consider it appropriate and these details are not to be disposed of unless permitted by law. The latest amendment says that the back up of the books of account and other documents kept in electronic mode, including at any place outside India have to be kept in servers physically located in India “on a daily basis.” The earlier requirement was to maintain them in servers in India on a periodic basis.

Also, companies have to give more information about the service provider that maintains the books of accounts and other documents in electronic mode. The amendment says that where the service provider is located outside India, the name and address of the person in control of the books of account and other books and papers in India has to be reported. This has to be reported to the registrar of companies on an annual basis.

The idea is to make sure that the financial and key operational details of businesses are available for the authorities at any given point in time. This reflects the increased monitoring that regulatory agencies are undertaking for better compliance. 

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