MCA notifies to issue & transfer all shares in dematerialised form only by all unlisted Public companies

The Ministry of Corporate Affairs (MCA) has notified that with effect from 2nd October, 2018, issue of further shares and transfer of all shares by unlisted public companies shall be in dematerialised form only. The MCA has taken this step as a measure for further enhancing transparency, investor protection and governance in the corporate sector. The rules in this regard have been amended accordingly.

Key highlights of amended rules:

• Every unlisted public company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer shall ensure that before making such offer, entire holding of securities of its promoters, directors, KMP has been demateriarised;
• Every holder of securities of an unlisted public company, who intends to transfer such securities on or after 2nd October, 2018, shall get such securities dematerialised before the transfer;
• Every holder of securities of an unlisted public company, who subscribes to any securities of an unlisted public company (whether by way of private placement or bonus shares or rights offer) on or after 2nd October, 2018 shall ensure that all his existing securities are held in dematerialized form before such subscription;
• Every unlisted public company shall facilitate dematerialisation of all its existing securities by making necessary application to a depository and shall secure International security Identification Number (ISIN) for each type of security and shall inform all its existing security holders about such facility;
• Every unlisted public company shall ensure that it makes timely payment of fees (admission as well as annual) to the depository and registrar to an issue (RTA) and share transfer agent (STA) in accordance with the agreement executed between the parties;
• The audit report provided under regulation 55A of SEBI (Depositories and participants) Regulations, 1996 shall be submitted by the unlisted public company on a half-yearly basis to the Registrar (RoC) under whose jurisdiction the registered office of the company is situated;
• The grievances, if any, of security holders of unlisted public companies under this rule shall be filed before IEPF Authority;
• IEPF Authority shall initiate any action against a depository or participant or RTA and STA after prior consultation with SEBI.

Unlisted Public Companies are expected to facilitate the dematerialisation of their securities in coordination with Depositories and Share Transfer Agents.

Click here to download the Amended Rules

Clarification in filing Form BEN-1under the Companies Act, 2013

In continuation of General Circular No. 07/2018 dated 06.09.2018, MCA has received from stakeholders expressing certain difficulties in filing a declaration in Form No. BEN-1 in respect of Companies (Significant Beneficial Owners) Rules, 2018 notified vide G.S.R. No. 561(E) dated 13.06.2018.

Accordingly, the matter has been examined and it is hereby informed that keeping in view stakeholders concerns, Form No. BEN-1 would be revised. As such, the due date of 10thSeptember, 2018 for filing BEN-1 declaration would be revised and a revised BEN-l form would be notified shortly. Stakeholders are advised to file declaration as per the revised form only and adhere to the time lines which will be specified therein.

Click here to download the Circular