Compliance Management, Audit and Due Diligence · Documentation and Maintenance of Records

Maintenance of Documents in Electronic Form under Section 120

Updated 11 October 2026 · Fact-checked

Section 120 of the Companies Act, 2013 lets a company keep any document, record, register or minutes required by the Act, or open to inspection under it, in electronic form, and allow inspection or copies in that form. The form and manner are as prescribed in the rules. You apply it by checking the rule conditions.

Understand Maintenance of Documents in Electronic Form (Section 120)

Companies must keep many records: registers of members and directors, minutes, returns, and more. Earlier these were kept in physical books. Section 120 removes the need for paper by allowing electronic maintenance.

The section has two limbs. Limb (a) covers any document, record, register or minutes required to be kept by a company. Limb (b) covers anything the Act allows to be inspected or copied by any person. For both, the record may be kept, inspected, or copied in electronic form, in the form and manner prescribed.

Note the opening words: "without prejudice to any other provisions of this Act". Section 120 is an enabling provision. It does not cancel the duty to keep the record, or the rights of inspection given by other sections. For example, section 94 still decides where registers are kept and who may inspect them, and what fee applies.

The section itself does not list the technical conditions. It leaves them to the rules. In your answer, say so. Then describe the rule-level safeguards in general terms: records must be accessible and readable, secure against tampering and loss, authenticated, and capable of being produced for inspection when asked. Name the rule (the Companies (Management and Administration) Rules, 2014) but do not quote rule numbers or details unless you are sure of them.

Do not confuse this with section 398 and section 399. Those deal with filing with, and inspection of records kept by, the Registrar in electronic form. Section 120 deals with records kept by the company. Section 397 makes Registrar-authenticated electronic copies admissible as evidence.

Key rules to remember

Scope of section 120: Document, record, register, minutes, etc. required to be kept by a company OR allowed to be inspected or copied under the Act → may be kept, inspected or copied in electronic form; Two limbs: (a) required to be kept, (b) allowed to be inspected or copied. Both are enabling.
Form and manner: Electronic form in such form and manner as may be prescribed; The details come from the rules, not from the section. Say this in every answer.
Section 120 versus section 94: Section 120: how (electronic form). Section 94: where kept, who inspects, fees, refusal penalty; Section 120 works "without prejudice to" other provisions, so section 94 still applies.
Refusal of inspection under section 94: Penalty ₹1,000 per day of default, maximum ₹1,00,000, on the company and every officer in default; Applies where inspection, extract or copy under section 94 is refused.
Registrar-side provisions: Section 397: authenticated electronic copies admissible as evidence. Section 398: electronic filing. Section 399: inspection of Registrar's records; These concern the Registrar's records, not the company's own records under section 120.

How to solve Maintenance of Documents in Electronic Form (Section 120) questions

Use this method for any case or theory question on keeping records electronically.

1Identify the document: is it a register, minutes, return or other record the company must keep, or one open to inspection?
2Quote section 120: such records may be kept, inspected or copied in electronic form, in the prescribed form and manner.
3State that the section is enabling and works without prejudice to other provisions, so the underlying duty to keep the record remains.
4Apply the related section: for registers and returns, section 94 on place, inspection, extracts and fees.
5Apply the rule-level safeguards in general terms: readability, security, authentication, and ability to produce the record on inspection. Cite the Management and Administration Rules, 2014 by name only.
6Check whether the question is really about the Registrar (sections 397 to 399) and separate the two.
7State consequences if inspection is refused: the section 94(4) penalty and the Central Government's power under section 94(5).
8Conclude with a clear, practical advice line for the company.

Quickest way: Four-line answer frame

When to use it: Use when you have about five minutes for a short-note or advice question.

Line 1: Section 120 permits electronic keeping, inspection and copies of company records, in the prescribed form and manner.
Line 2: It is enabling and without prejudice to other provisions, such as section 94.
Line 3: Apply to the facts: which record, who asks, where it is kept, whether it can be produced.
Line 4: Conclude with the consequence of refusal (₹1,000 per day, up to ₹1,00,000) and one compliance step, such as keeping a secure, backed-up system.

Common mistakes in Maintenance of Documents in Electronic Form (Section 120)

Saying section 120 makes electronic records compulsory.
Students read "may be kept" as a mandate.
Fix: Write that it is permissive. A company may still keep physical records unless some other provision requires otherwise.
Confusing section 120 with sections 397 to 399.
All deal with electronic documents and the words look alike.
Fix: Section 120 is about the company's own records. Sections 397 to 399 concern documents filed with or kept by the Registrar.
Stating that electronic records remove section 94 inspection rights.
Students think a new form means a new regime.
Fix: Section 120 is without prejudice to other provisions. Members and others keep their section 94 rights, now exercisable on electronic records.
Quoting rule numbers or technical specifications from memory.
Students try to look detailed.
Fix: Name the Companies (Management and Administration) Rules, 2014 and describe the safeguards in general terms. A wrong number loses marks.
Misstating the section 94(4) penalty.
Mixing it with other per-day penalties.
Fix: Remember ₹1,000 per day, maximum ₹1,00,000, for refusal of inspection, extract or copy.
Ending without a conclusion or advice.
Students treat it as pure theory.
Fix: Subjective papers expect provision, analysis, conclusion. Finish with what the company should do.

Worked examples

Example 1

Sunrise Textiles Limited, Surat, keeps its register of members only on a secured server and has no physical copy. A member demands inspection during business hours and the company refuses, saying records are not in paper form. Advise the company.

Show the solution

Provision: section 120 allows records required to be kept by a company, or open to inspection, to be kept, inspected or copied in electronic form, as prescribed.
Analysis: the register of members is a record the company must keep. Keeping it electronically is permitted, so the company's format is not itself a violation, provided the prescribed form and manner are followed.
Section 120 is without prejudice to section 94. Under section 94(2), registers are open to inspection by any member during business hours without fee. Electronic form does not remove this right.
So the company cannot refuse inspection on the ground that records are electronic. It must arrange inspection of the electronic register.
Under section 94(3), the member may take extracts without fee, or require a copy on payment of the prescribed fee.
Consequence: refusal attracts a penalty of ₹1,000 for every day, maximum ₹1,00,000, on the company and every officer in default. The Central Government may also direct immediate inspection under section 94(5).

Answer: The electronic register is valid, but the refusal is wrong. The company must allow inspection and extracts. Refusal exposes it and its officers to a penalty of ₹1,000 per day up to ₹1,00,000.

Example 2

Write a short note distinguishing section 120 from section 399 of the Companies Act, 2013.

Show the solution

Section 120 concerns documents, records, registers and minutes kept by the company, or open to inspection, which may be kept, inspected or copied in electronic form as prescribed.
Section 399 concerns documents kept by the Registrar. Any person may inspect them by electronic means on payment of the prescribed fee, and may require certified copies or extracts.
Section 399(3) makes a Registrar-certified true copy admissible in legal proceedings as of equal validity with the original. Section 399(2) restricts court process for production of Registrar's documents without leave.
Section 120 gives no such evidentiary rule. Admissibility of Registrar-authenticated electronic records is dealt with in section 397.
Practical point: a company keeps its own registers under section 120 and section 94, but looks to sections 397 to 399 for filed documents.

Answer: Section 120 enables electronic keeping and inspection of the company's own records. Section 399 governs inspection and certified copies of documents held by the Registrar, with evidentiary value under 399(3) and section 397.

Exam tips

Always say the form and manner are prescribed in the rules. Examiners look for this link.
Pair section 120 with section 94 in any question about inspection of registers. Quote the ₹1,000 per day and ₹1,00,000 figures.
Keep the company-versus-Registrar distinction clear in notes: section 120 against sections 397 to 399.
In case studies, structure the answer as provision, analysis, conclusion, and add a drafting or compliance point such as a board-approved electronic records policy.
Do not invent rule numbers. A precise statute reference with a general rule description is safer.

Practice questions from Documentation and Maintenance of Records

Maintenance of Documents in Electronic Form (Section 120) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Maintenance of Documents in Electronic Form (Section 120): frequently asked questions

What does section 120 of the Companies Act, 2013 provide?

It allows any document, record, register or minutes that a company must keep, or that may be inspected or copied under the Act, to be kept, inspected or copied in electronic form. The form and manner are as prescribed.

Is it compulsory to keep statutory registers in electronic form?

No. Section 120 uses the word "may", so it is an enabling provision. A company can keep physical records unless another provision requires otherwise.

Do members still have inspection rights if registers are electronic?

Yes. Section 120 is without prejudice to other provisions, so section 94 rights continue. Members can inspect registers during business hours without fee and take extracts, and refusal attracts a penalty.

How is section 120 different from sections 398 and 399?

Section 120 deals with records kept by the company. Sections 398 and 399 deal with filing with the Registrar and inspection of documents kept by the Registrar in electronic form.