Govt amends rules pertaining to maintaining of books by companies


PTI | New Delhi | Updated: 17-08-2022 21:40 IST | Created: 17-08-2022 21:40 IST
Govt amends rules pertaining to maintaining of books by companies
  • Country:
  • India

The government has amended the rules pertaining to maintaining books of accounts by companies, with experts saying the changes will provide for enhanced scrutiny of the accounts by the authorities concerned.

Earlier this month, the corporate affairs ministry, which is implementing the companies law, notified the Companies (Accounts) Fourth Amendment Rules, 2022.

The changes relate to the manner in which books of accounts are to be kept in electronic form.

Now, companies have to ensure that books of accounts and other relevant books and papers maintained in electronic mode remain accessible in India at all times.

Also, the back-up of the books of accounts and other books and papers of the company maintained in electronic mode should be compulsorily kept in servers physically located in India on a ''daily basis''.

Earlier, the requirement was only on a ''periodic basis''.

Megha Bhargava, Partner at Cyril Amarchand Mangaldas, said the amendments will increase the degree of compliance for companies for the purposes of maintaining books of accounts in electronic form and it allows for an enhanced level of scrutiny and access by Indian authorities.

As per the amended rules, a company has to notify the Registrar of Companies (RoC) concerned about the name and address of the person in control of the books of accounts and other books and papers in India in the annual filings in cases where the service provider is located outside India.

''This will allow the Indian authorities to pin accountability on persons in India, in cases where the service provider is located outside India,'' Bhargava said.

Sandeep Jhunjhunwala, M&A and Regulatory Partner at Nangia Andersen LLP, said the rules have been amended with a view to giving more stimuli to accessibility of books and papers maintained in electronic mode by companies.

The notification comes following a recent CBDT notification prescribing elaborate books and records to be maintained by charitable institutions. The amendments may have the effect of disturbing status quo for corporates, especially those which have external dependencies on third-party cloud service providers for maintaining their books of accounts, he noted.

The notification was issued on August 5.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback