Documents and Records preservation by a Company under Companies Act 2013 and LODR

Documents and Records preservation by a Company as per the Companies Act 2013 and SEBI LODR

Upon day to day working by a Company, there are some documents, records etc. accumulates which may be required by a Company at a later point of time to prove certain transactions. So, the question arises as for how much time a Company is required to maintain their documents, records, returns etc.

In today's time where handling documents in hard format is difficult due to lack of storage space, torning and mutilation over time and efficient staff to take care of the records. Thus, certain records can also be maintained in Electronic form by a Company. 

A Company is mandated to maintain documents, records, return, forms etc. as per the Companies Act and LODR also. So what does document mean, what is included in the category of documents and what not.

For this, we have to look Section 2(36) of the Companies Act, 2013, which provides that "document" includes summons, notice, requisition, order, declaration, form and register, whether issued, sent or kept in pursuance of this Act or under any other law for the time being in force or otherwise, maintained on paper or in electronic form.

Further, to keep records in Electronic format the word records' was defined. As per this "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. 

Now, let us look at certain provisions as prescribed in the Companies Act, 2013 regarding maintenance of documents, records etc. by a Company along with other statutory details.

Before going further, let us divide the types of documents and records into categories:

A. Documents to be preserved permanently;

B. Documents with preservation period of not less than eight years after completion of the relevant transactions;

C. Miscellaneous Documents.

So, let us study and analyze the provisions of Companies Act:

A. Documents to be preserved permanently:

Sl. no.	Section/ Rules	Description of document	Prescribed Format, if any	Place of maintaining document
1.	Section 7(4) of the Companies Act,2013 read with Rule	Incorporation documents and information as originally filed with ROC.	-	Registered Office

2.	Rule 6(3) of the Companies (Share Capital and Debentures) Rules, 2014.	Register of Renewed and Duplicate Share Certificates	Form no. SH-2	Registered Office of the company /Registrars & Transfer Agent of the company
3.	Section 85 of the Companies Act,2013 read with Rule 10 (4) of  the Companies (Registration of Charges) Rules, 2014	Register of charges	Form no. CHG-7	Registered Office

4.

Rule 5 (2) and 15 (1) of the Companies (Management and Administration) Rules, 2014

Register of Members including an index of the names

Form no. MGT-1

Registrars & Transfer Agent of the company

5.	Rule 5 (2) and 15 (4) of the Companies (Management and Administration) Rules, 2014	Foreign register of Members	Form no. MGT-3	Registrars & Transfer Agent of the company
6.	Rule 25 (1)(e) of the Companies (Management and Administration) Rules, 2014	Minutes books of General Meeting,	-	Registered Office
7.	Rule 25 (1)(f) of the Companies (Management and Administration) Rules, 2014	Minutes books of Board Meeting and Committee Meetings	-	Registered Office or such place as Board may decide
8.	Section 186(9) of the Companies Act,2013 read with  Rule 12(1] & (3) of the Companies (Meetings of Board and its Powers) Rules, 2014.	Register of loans, guarantee, security and acquisition made by the company	Form no. MBP-2	Registered Office of the company and shall be kept in the custody of the company secretary of the company.
9.	Section 187(3) of the Companies Act,2013 read with Rule 14(1) & (3) of the Companies (Meetings of Board and its Powers) Rules, 2014.	Register of investments not held in its own name by the company	Form no. MBP-3	Registered Office of the company and shall be kept in the custody of the company secretary of the company.
10.	Section 189(2) of the Companies Act,2013 read with  Rule 16(1) & (3 of the Companies (Meetings of Board and its Powers) Rules, 2014	Register of contracts with related party and contracts and Bodies etc. in which directors are interested	Form no. MBP-4	Registered Office of the company and shall be kept in the custody of the company secretary of the company.

B. Documents with preservation period of not less than eight years after completion of the relevant transactions:-

Sl. no.	Section/ Rules	Description of document	Format	Time Limit for preservation	Place of maintaining document
1.	Rule 14 (3) of the Companies (Acceptance of Deposits) Rules, 2014	Registers of deposits		Period of not less than 8 years from the financial year in which the latest entry is made in the register	Registered Office
2.	Section 85 of the Companies Act,2013 read with Rule 10 (4) of  the Companies (Registration of Charges) Rules, 2014	The instrument creating a charge or modification	-	Period of 8 years from the date of satisfaction of charge by the company	Registered Office
3.	Rule 5 (2) and 15 (2) of the Companies (Management and Administration) Rules, 2014	Register of debenture holders including an index of the names	Form no. MGT-2	Period of 8 years from the date of redemption of debentures or securities, as the case may be, and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for such purpose	Registered Office of the company /Registrars & Transfer Agent of the company
4.	Rule 5 (2) and 15 (2) of the Companies (Management and Administration) Rules, 2014	foreign register of debenture holder	Form no. MGT-3	Period of 8 years from the date of redemption of debentures or securities, as the case may be, and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for such purpose	Registered Office of the company /Registrars & Transfer Agent of the company
5.	Section 94 of the Companies Act,2013 read with Rule 15 (3) of the Companies (Management and Administration) Rules, 2014	Annual return and copies of all certificates and documents required to be annexed thereto	Form no. MGT-7	Period of 8 years from the date of filing with the Registrar	Registered Office
6.	Rule 9 (3) of the Companies (Meetings of Board and its Powers) Rules, 2014.	Disclosures/ Notices by a director of his interest	Form no. MBP- 1.	Period of 8 years from the end of the financial year to which it relates	Registered office
7.	Section 128(5) of the Companies Act,2013	Books of Accounts including vouchers relevant to any entry in such books of account	-	8 financial years preceding current financial year	Registered office of the company or at such other place in India

C. Miscellaneous Documents :-

Sl. no.	Section/ Rules	Description of document	Time Limit for preservation	Place of maintaining document
1.	Rule 7 (3) of the Companies (Share Capital and Debentures) Rules, 2014.	All books and documents relating to the issue of share certificates, including the blank forms of share certificates	Not less than 30 years and in case of disputed cases, shall be preserved permanently	Registrars & Transfer Agent of the company
2.	Rule 7 (3) of the Companies (Share Capital and Debentures) Rules, 2014.	All certificates surrendered to a company shall immediately be defaced by stamping or printing the word “cancelled” in bold letters	may be destroyed after the expiry of 3 years from the date on which they are surrendered, under the authority of a resolution of the Board and in the presence of a person duly appointed by the Board in this behalf:	Registrars & Transfer Agent of the company

Preservation of Books and Papers of Amalgamated Companies.  

As per section 239 of the Companies Act 2013 

The books and papers of a company which has been amalgamated with, or whose shares have been acquired by, another company under this Chapter (i.e. 230 - 240) shall not be disposed of without the prior permission of the Central Government and before granting such permission, that Government may appoint a person to examine the books and papers or any of them for the purpose of ascertaining whether they contain any evidence of the commission of an offence in connection with the promotion or formation, or the management of the affairs, of the transferor company or its amalgamation or the acquisition of its shares.

Maintenance of records in electronic form:

Pursuant to Section 120 of the Companies Act,2013 read with rule 27 of the Companies (Management and Administration) Rules, 2014. The documents in electronic form shall be maintained in following manner:

a) 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;

b) the information as required under the provisions of the Act or the rules made there under should be adequately recorded for future reference;

c) the records must be capable of being readable, retrievable and reproducible in printed form

d) 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;

e) the records, once dated and signed digitally, shall not be capable of being edited or altered;

f) 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.

Please also take note that as per Section 120 (b) these documents and records are subject to inspection by any person.

Miscellaneous provision as per Rule 7 of the Registration, Offices and Fees Rules, 2014 

The company shall retain such documents duly stamped in original permanently for the documents relating to incorporation and matters incidental thereto, changes in any of the clauses of the Memorandum and Articles of Association.

and in other cases for a minimum period of eight years from the date of filing of the documents and shall be required to produce the same as and when the same is required for inspection and verification by the competent authority under any law for the time being in force.

These other cases documents can be every application, financial statement, prospectus, return, declaration, memorandum, articles, particulars of charges, or any other particulars or document or any notice, or any communication or intimation required to be filed or delivered or served under the Act and rules made there under, including the documents which are required to be filed on stamp paper.

Maintenance of Documents, records etc. by listed entities as per LODR

Regulation 9 of the Sebi LODR also provides for keeping and maintenance of documents and records by the Listed Company. It also mandates to formulate a policy for preservation of document/ records to identify documents that need to be maintained, preserved and disposed. Keeping of documents in electronic form is also permitted by LODR for the listed entities.

Destruction of the documents, records etc.

Although Companies Act is silent on to whether the Company can destruct the records etc. after a particular time of period. It simply provides for maintenance of records only. So, we can assume that after completion of the specified period say 8 years the Company can destruct MBP-1 received and held in the safe custody of the Company. The Company may destroy the documents, records etc. under the guidance and supervision of some senior officers of the Company that may be Managing Director, Company Secretary or Chief Financial Officer of the Company.

Again, it is also not prescribed that to maintain the record or entries in a register of all the destructed documents by the Company. But, for the sake of good corporate governance practices, the Company should maintain a register of the destructed and destroyed records. The Company Secretary of the Company or any other officer may be authorized to keep such records of destructed documents with date and mode of destroying.