Dematerialisation Of Securities Of Private Companies

Published date20 November 2023
Subject MatterCorporate/Commercial Law, Corporate and Company Law, Securities
Law FirmStratage Law Partners
AuthorStratage Law Partners

MCA notified the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 dated October 27, 2023 amending the Companies (Prospectus and Allotment of Securities) Rules, 2014. The key changes are set out hereunder:

  • New rule 9B has been introduced, making it mandatory for the securities of the private companies to be in dematerialised form. The said rule does not apply to a Government company or small company.
  • Every private company is required to issue its securities only in dematerialised form and shall facilitate the dematerialisation of all its existing securities within a period of 18 months from March 31 2023.
  • Any holder of securities of the private company who intends to transfer its securities or be allotted any securities, of a private company, on or after September 30, 2024 is required to get such securities dematerialised before such transfer or allotment.
  • Private companies are required to file its reconciliation of share capital audit...

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