How safe is it to store documents only in electronic form?

Imants Kreičmanis, legal assistant

Reader asks: Currently, most company documents are stored electronically, including long-term documents, such as employment contracts, which must be stored for 90 years. How can a company be sure that the service provider will still be able to ensure access to these e-documents after 90 years? How to protect against their loss?

Since e-documents do not occupy physical space, they can be stored as an alternative to paper documents. Digitizing and storing documents electronically helps protect against threats that could irreversibly damage paper records, such as mold, fire, insects, rodents, etc.

According to Article 3, Paragraph 1 of the Electronic Documents Law, e-documents have the same legal force as paper documents, provided they include an electronic signature and other required attributes specified in Article 4 of the Law on the Legal Force of Documents.

How long should documents be stored?

Legislation specifies the mandatory retention periods for different types of documents. The required duration depends on the document type. For example, Article 28 of the Accounting Law (GL) states that accounting registers and inventory lists must be kept for 10 years. For payroll and leave calculation documents issued before 1999, the retention period is 75 years. Annual reports are to be kept until the company is reorganized or terminated — no specific time is usually set.

Many companies should also take into account Cabinet Regulation No. 690 “Regulations on documents certifying a person’s employment or education which have archival value and their retention periods.” For instance, employment contracts and amendments, staff lists with job titles, job descriptions, and medical opinions about a worker’s inability to fulfill duties must be stored for 90 years from the person’s birth or 75 years if the date of birth is unknown or if the files include multiple persons. In some cases, documents must be kept permanently if they contain information of historical, public, cultural, or scientific value.

Converting documents into electronic format

According to Article 29, Paragraph 1 of the Accounting Law, a company has the right to convert paper accounting documents into e-documents for storage in an electronic environment. Paragraph 2 states that a document converted for electronic storage has the same legal force as the original and the original may be destroyed only if specific conditions are met. To convert a document:

• Ensure the original content is preserved and compliant with the document retention period;
• Ensure it is readable on a screen and printable if needed;
• Protect the converted file from alteration or destruction;
• Document the conversion and destruction process according to the company’s internal rules.

Documents such as annual reports, inventory lists, and payroll records (including forced downtime compensation) may be converted.

If the requirements are met, such converted documents do not need to be additionally signed with a secure electronic signature — they have the same legal force as the original paper documents. Therefore, storing accounting records electronically is considered safe, and keeping paper copies is not mandatory.

Documents not explicitly recognized by law as replaceable by digital versions can still be stored electronically as derivative copies if they comply with the formatting rules defined in Cabinet Regulation No. 558. However, in such cases, original paper documents must also be retained unless the law states otherwise.

Responsibility for document retention

Article 33, Paragraph 1 of the Accounting Law states that the company’s manager is responsible for preserving original accounting documents and protecting them from loss or destruction. Article 42 provides for administrative penalties for failure to comply with accounting rules. Under Article 28 of the Archives Law, violations of document and archive management procedures may result in warnings or fines for board members, officials, or legal entities.

Regardless of the method chosen, it is typically the responsible person or company manager who is held accountable for violations of document management rules — not the service provider. Therefore, the responsible person should ensure they have secure access to copies of documents. If a third party stores documents under contract, the agreement should include liability for loss, including any financial penalties that may result.

Solutions for secure e-document storage

Various solutions exist to ensure compliance with retention periods. It is possible to store copies with document archiving service providers, but even this is not completely secure — service providers may cease operations, reorganize, or experience technical issues.

Safe storage can be ensured using technical methods such as: keeping copies with multiple providers, storing documents in several online locations simultaneously, or saving files on multiple portable media devices.

This article was created in cooperation with iBizness.lv – a support and advisory platform for entrepreneurs and business leaders, featuring interviews and experience stories from seasoned business owners, and expert insights into management, marketing, HR, technology, and finance.