If Google CEO, Eric Schmidt was based in SA, his habit of deleting e-mails as soon as he has finished reading them would soon be illegal.

The new Companies Act, which comes into effect in July, demands that any "documents, accounts, books, writing, records or other information" relating to a company's activities must be kept for up to seven years.

The stipulation on maintaining records in the new legislation is meant to keep a trail of events and details the operating procedures of an organisation. The most important reason to keep records is to provide evidence of what was agreed to in case of a legal dispute.

Google found this out the hard way. The Internet giant was taken to court by media powerhouse Viacom, over its subsidiary YouTube's copyright infringement. Google lost the case. According to State.com, Schmidt testified: "It has been my practice for 30 years not to retain my e-mails unless asked specifically."

If the case had been held in SA under the new act, Schmidt could have spent up to a year in prison and might have had to pay a fine for deleting his e-mails.

In fact, the common practice of companies asking employees to delete e-mails to free up data space on computer systems could also be illegal according to the interpretation of the act.

Keeping old e-mails and document records does not only apply to companies.

All organisations - including non profit ones like churches and sports clubs - have to maintain their records under the act, says Anthony Isherwood of the Eastgate Group

The Eastgate Group is already taking advantage of the new legislation and will soon be able to offer small businesses the chance to store data off site at a low monthly rates. Storing data electronically is up to 25 times cheaper than storing records on paper. Accessing the data is also easier and faster than retrieving boxes of data.

Data storage will become a grudge purchase to an organisation, just like medical aids.

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