Sections 401 and 402 of Companies Act 2013: Electronic Value Added Services and Application of IT Act
Sections 401 and 402 of the Companies Act, 2013 form part of the statutory framework governing electronic corporate records and services. Section 401 authorises the Central Government to provide prescribed value added services electronically and to levy the prescribed fee. Section 402 applies the relevant provisions of the Information Technology Act, 2000 to electronic records specified under Section 398, subject to consistency with the Companies Act, 2013.
Section 401 - Provision of Value Added Services Through Electronic Form
Section 401 empowers the Central Government to provide value added services through electronic form. It also permits the Government to levy the fee prescribed for such services.
Text of Section 401
The Central Government may provide such value added services through the electronic form and levy such fee thereon as may be prescribed.
Meaning and scope of Section 401
The provision enables the Central Government to make additional company-law related services available electronically. The expression "value added services" is therefore relevant to services provided electronically in addition to the basic statutory electronic filing and record-management framework.
Section 401 should be read in the broader context of the electronic administration provisions contained in Chapter XXIV of the Companies Act, 2013, particularly Section 398, which deals with electronic filing, maintenance, inspection and related electronic functions.
Section 402 - Application of Provisions of Information Technology Act, 2000
Section 402 connects the Companies Act electronic-record framework with the Information Technology Act, 2000. It applies the provisions of the Information Technology Act concerning electronic records, including requirements relating to the manner and format of filing, to electronic records specified under Section 398 of the Companies Act.
Text of Section 402
All the provisions of the Information Technology Act, 2000 (21 of 2000) relating to the electronic records, including the manner and format in which the electronic records shall be filed, in so far as they are not inconsistent with this Act, shall apply in relation to the records in electronic form specified under section 398.
Meaning and scope of Section 402
Section 402 means that the legal framework governing electronic records under the Information Technology Act, 2000 also applies to electronic records covered by Section 398 of the Companies Act, 2013, to the extent that those provisions are not inconsistent with the Companies Act.
The qualification "in so far as they are not inconsistent with this Act" is important. Where the Companies Act, 2013 contains a specific requirement governing a company-law electronic record, the Companies Act requirement continues to govern that matter.
Connection with Section 398 of the Companies Act, 2013
Section 402 expressly refers to records in electronic form specified under Section 398. Section 398 provides the statutory framework under which the Central Government may prescribe electronic filing and electronic administration of various applications, documents, returns, notices, communications and other records under the Companies Act.
The electronic framework under Section 398 includes matters such as electronic filing and authentication of documents, electronic maintenance of records by the Registrar, electronic inspection, electronic payment of statutory fees and electronic performance of specified functions by the Registrar.
Sections 398, 401 and 402 therefore operate together as part of the Companies Act framework for electronic corporate administration.
Electronic Filing Under the Companies Act
Corporate filings are now substantially administered through the Ministry of Corporate Affairs electronic filing infrastructure. Companies and other eligible users should use the applicable MCA electronic forms and services and comply with the Companies Act, the applicable rules, notifications and filing requirements in force at the relevant time.
The Companies (Registration Offices and Fees) Rules, 2014 also form an important part of the electronic registration and filing framework under the Companies Act, 2013.