Coping with the increasing spread of Maintaining Accounts in Cloud Servers, Rule 3 of Companies (Accounts) Rules 2014 lays down the manner of maintenance of books of account in Electronic mode.
(1) The books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India so as to be usable for subsequent reference.
(2) The books of account and other relevant books and papers referred to in sub-rule (1) shall be retained completely in the format in which they were originally generated, sent or received, or in a format which shall present accurately the information generated, sent or received and the information contained in the electronic records shall remain complete and unaltered.
(3) The information received from branch offices shall not be altered and shall be kept in a manner where it shall depict what was originally received from the branches.
(4) The information in the electronic record of the document shall be capable of being displayed in a legible form.
(5) There shall be a proper system for storage, retrieval, display or printout of the electronic records as the Audit
Committee, if any, or the Board may deem appropriate and such records shall not be disposed of or rendered unusable, unless permitted by law:
Provided that the back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a periodic basis.
(6) The company shall intimate to the Registrar on an annual basis at the time of filing of financial statement-
(a) the name of the service provider;
(b) the internet protocol address of service provider;
(c) the location of the service provider (wherever applicable);
(d) where the books of account and other books and papers are maintained on cloud, such address as provided
by the service provider.
Explanation.- For the purposes of this rule, the expression “electronic mode†includes “electronic form†as defined in
clause (r) of sub-section (1) of section 2 of Information Technology Act, 2000 (21 of 2000) and also includes an
electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000) and “books of account †shall have the meaning assigned to it under the Act.
Accordingly since the books of account are being maintained at a location different from the registered office of the company, the digital location details of the books of accounts need to be filed with the Registrar of Companies.
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