As per the Companies Act 2013 and the Rules framed thereunder, companies are mandated to maintain records in the form of registers that contain particulars relating to their dealings, including information about the company’s directors, shareholders, loans, etc.
Presently, there are about fifteen statutory registers under Companies Act 2013 that companies are obligated to maintain.
The Company Law Committee headed by Corporate Affairs Secretary Rajesh Verna took note of the compliance costs associated with the physical maintenance of statutory registers, particularly given that they require frequent updates. To ease this regulatory burden, the Committee deliberated creating an online platform for maintaining statutory registers under Companies Act 2013.
It was felt that creating such an electronic platform to maintain registers would make the process more secure and transparent, thereby avoiding duplication of effort for companies. It was further noted that a single consolidated platform would make sharing and viewing information stored in such registers easier for all stakeholders.
The Committee was apprised of emerging global regulatory practices that encourage maintaining statutory registers electronically through a platform operated and maintained by the Central Government.
For instance, in Singapore, the Accounting and Corporate Regulatory Authority47 provides an electronic platform and requires companies to maintain and update information in registers on such platform. Similarly, the Modernising Business Registers Program in Australia, implemented as a part of its Digital Business Plan between 2021-2024, proposes establishing Australian Business Registry Services, which aims to streamline how companies register, view, share and maintain business information.
In light of these globally accepted practices and benefits of maintaining registers electronically, the Committee recommended that certain class or classes of companies, as may be prescribed, should be required to compulsorily maintain their registers on an electronic platform in such form and manner as may be prescribed by the Central Government.
For this purpose, the Committee recommended that the Central Government may set up an electronic platform for such registers to be maintained, stored and periodically updated. Additionally, the requirement to include past records pertaining to statutory registers on the electronic platform should also be provided with adequate transitional period.
Observations and Recommendations of the Committee:
Certain companies should be required to mandatorily maintain their registers on an electronic platform in the manner laid down by the Central Government. For this purpose, the Central Government may set up an electronic facility.
The Central Government may direct the company to share the information held on such statutory registers pursuant to certain enforcement-related functions.
Proposed amendments to the Companies Act 2013
Amendment to Section 120 to mandate that prescribed class or classes of companies maintain registers on an electronic facility provided by the Central Government.
Central Government may be allowed to direct the company to share information held on the statutory registers in certain enforcement-related functions.
List of Statutory Registers maintained under the Companies Act 2013 and rules made thereunder:
|S No.||Section under CA-13/ Corresponding Rule||Name of Register|
|1.||Section 42 of CA-13 r/w Rule 14(4) of Companies (Prospectus and Allotment of Securities) Rules, 2014||Record of private placement offers (PAS- 5)|
|2.||Section 46(3) r/w Rule 6(3)(a) of Companies (Share Capital and Debentures) Rules, 2014||Register of renewed & duplicate share certificates (Form SH-2)|
|3.||Section 54 r/w Rule 8(14)(a) of Companies (Share Capital and Debentures) Rules, 2014||Register of sweat equity shares (Form SH- 3)|
|4||Section 62 r/w Rule 12(10)(a) of Companies (Share Capital and Debentures) Rules, 2014||Register of employee stock options (Form SH-6)|
|5||Section 68(9) r/w Rule 17 (12) (a) of Companies (Share Capital and Debentures) Rules, 2014||Register of shares or securities bought back (Form SH-10)|
|6||Section 73 r/w Rule 14(1), Companies (Acceptance of Deposits) Rules, 2014||Register of deposits|
|7||Section 85(1) r/w Rule 10(1) of Companies (Registration of Charges) Rules, 2014||Register of charges (Form CHG-7)|
|8||Section 88(1)(a) r/w Rule 3(1) of Companies (Management and Administration) Rules, 2014||Register of members (Form MGT-1)|
|9||Section 88(1)(b) and (c) r/w Rule 4 of Companies (Management and Administration) Rules, 2014||Register of debenture holders and any other security holder (Form MGT-2)|
|10||Section 88(3) of CA-13 r/w Section 11 of the Depositories Act, 1996||Register and index of the beneficial owner|
|11||Section 88(4) r/w Rule 7(1), Companies (Management and Administration) Rules, 2014||Foreign register of members, debenture holders, other security holders or beneficial owners residing outside India (Form MGT-3)|
|12||Section 90(2) r/w Rule 5(1) of the Companies (Significant Beneficial Owners Rules), 2018||Register of significant beneficial owners (Form BEN-3)|
|13||Section 110 of CA-13 r/w Rule 22(10) of the Companies (Management and Administration) Rules, 2014||Register of Postal Ballot|
|14||Section 170(1)||Register of directors and (“KMP”) and their shareholding|
|15||Section 186(9) r/w Rule 12(1) of Companies (Meetings of Board and its Powers) Rules, 2014||Register of loans, guarantees, security and acquisition made by the company (Form MBP-2)|
|16||Section 187(3) r/w Rule 14(1) of Companies (Meetings of Board and its Powers) Rules, 2014||Register of investments made by a company and not held in its own name (Form MBP-3)|
|17||Section 189(1) r/w Rule 16(1) of The Companies (Meetings of Board and its Powers) Rules, 2014||Register of contracts or arrangements in which directors are interested (Form MBP-4)|