22 August 2022
Issuance of the Companies (Accounts) Fourth Amendment Rule, 2022
 
The Ministry of Corporate Affairs (MCA) has amended 'The Companies (Accounts) Rule 2014' by introducing 'The Companies (Accounts) Fourth Amendment Rules, 2022.'

Furthermore, the following changes are made under Rule 3 of The Company (Accounts) Rules.
 
The Companies (Accounts) Rule 2014 The Companies (Accounts) Fourth Amendment Rules, 2022
1. As per Section 128 (1) read with Rule 3 sub-rule (1), the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India. 1. As per Section 128 (1) read with Rule 3 sub-rule (1), the books of account and other relevant books and papers maintained in electronic mode shall remain accessible in India, at all times.
2. As per Section 128 (1) read with Rule 3 sub-rule (5) the back-up of the books of account and other books and papers of the Company maintained in electronic mode shall be kept in servers physically located in India on a periodic basis. 2. As per Section 128 (1) read with Rule 3 sub-rule (5) the back-up of the books of account and other books and papers of the Company maintained in electronic mode shall be kept in servers physically located in India on a daily basis.
3. As per Section 128 (1) read with Rule 3 sub-rule (6) the Company shall intimate to the Registrar on an annual basis at the time of filing of financial statement:
  1. the name of the service provider;
  2. the internet protocol address of the service provider;
  3. the location of the service provider (wherever applicable);
  4. where the books of account and other books and papers are maintained on the cloud, such address as provided by the service provider.
 3. As per Section 128 (1) read with Rule 3 sub-rule (6) the Company shall intimate to the Registrar on an annual basis at the time of filing of financial statement – additionally – (e)where the service provider is located outside India, the name and address of the person in control of the books of accounts and other books and papers in India.
Our Comments
As per Section 128 (1), the books of accounts of the Company have to be maintained at the registered office (RO) of the Company. The books of accounts can also be maintained in electronic form as per Rule 3 of the Companies (Accounts) Rules, 2014. This amendment has now emphasized that the books of account and other relevant documents maintained in electronic mode would be accessible in India at all times.

The Company is expected to maintain a proper system for storage, retrieval, display, or printout of the electronic records as the Board may deem appropriate. Back-up of the books of account maintained in electronic mode, including at a place outside India, if any, shall be kept in servers located in India now on a daily basis as against the previous provision of a periodic basis.

The Company has to notify the Registrar on an annual basis at the time of filing the financial statement and give the name and address of the person in control of the books of accounts and other relevant documents in India, where the service provider is located outside India.

The circular link is given for your ready reference.
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