Company Law
August 24, 2024
Company Law Update: MCA Notification Dated: 27.10.2023
Mandatory- Dematerialization of shares of Private Company:-
New Added Rule : Rule 9B of Companies (Prospectus and Allotment of Securities) Rules, 2014 read with section 29 of the Companies Act ,2013.
APPLICABILITY:
All Private Companies, except small companies. Unlisted Public Companies were already covered by Rule 9A.
(Small Company means a company other than public company which has Paid-up Share Capital less than 4 Crores and turnover less than 40 Crores as per audited financial statement on March 31, 2023.)
TIME LIMIT TO COMPLY:
18 Months from 31st March 2023 (or Subsequent year-end when company ceases to be small company) = till 30th September 2024.
EFFECT OF THIS NEW RULE:
- Mandatory dematerialization of securities of directors, promoters, KMPs .
- Further issue of securities only in Demat form.
- Transfer and subscription to further shares by existing holders only in demat form.
- Additional Compliance to file the Form PAS-6 by company on half yearly basis.
NON-COMPLIANCE:
Penalty of Rs. 10,000 for each offence, and Rs. 1000 per day for continuing offence.
