The Indian Companies Act 2013 (PDF) has introduced many significant changes in the old company law of India. One such change is the shift towards maintenance and inspection of company’s documents in electronic or digital formats. This has given rise to many techno legal issues that most of the Indian companies are not capable of managing effectively. Contraventions of various laws of India are inevitable as corporate compliance requirements in India have drastically changed.
The Companies Act 2013 has imposed stringent liability upon the directors and officers in default. These include liabilities for failure to observe cyber law due diligence (PDF), cyber security compliances, cyber law compliances, e-discovery related compliances, cyber forensics issues, etc.
For instance, Ebay plans to boost its cyber security as global legal actions and litigations may be initiated against it for failure to comply with cyber security disclosure requirements. Similarly, foreign companies and e-commerce portals would be required to register in India and comply with Indian laws. An officer in default can be held liable for tons of techno legal compliances that have emerged in the recent times.
Perry4Law has received many legal consultancy requests regarding maintenance and inspection of records in digital or electronic form. We believe that it would be a good long term corporate strategy to start converting paper documents into electronic formats. This is not an easy task and it would take considerable time, efforts and monetary resources to do it gradually. In particular, the mandates of Public Records Act 1993 and IT Act 2000 are not easy to manage.
Perry4Law believes that this is the core and primary responsibility of the Board of Directors and they must introduce suitable policies and strategies in this regard as soon as possible. This may protect the interests of the company, shareholders and the directors in the long run.