MCA Update Sep 2018: Abridged Director Report for Small CompaniesSeptember 10, 2018
Refund of Tax for International Travelers to UAESeptember 13, 2018
MANDATORY DEMAT OF SECURITIES FOR UNLISTED PUBLIC COMPANIES FROM 01/10/2018
Ministry of Corporate Affairs, Government of India wide notification dated 10th September, 2018 amended the Companies (Prospectus and Allotment of Securities) Rules, 2014. These rules may be called the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018. They shall come into force on the 2nd day of October, 2018.
All Unlisted public Companies need to:
- Issue all Securities in demat form;
- Facilitate de-materialization of all its securities.
- The entire holding of Promoter, Director & KMP shall be in demat form.
- Every Public unlisted Companies shall make sure that it has: –
- made timely payment of admission and annual fees to the depository and registrar to an issue and to a transfer agent as agreed between the parties.
- maintained security deposit of not less than 2 year’s fee with the depository and registrar to an issue and to a transfer agent as agreed between the parties.
- complied with SEBI / Depository Regulations, Circulars, Guidelines, Directions.
- Default in any of the above clauses by the Unlisted Public Companies shall not be allowed to offer any securities or buy buck its securities or bonus issue or right issue till the payment of depositories or registrar to an issue and share transfer agent are made.
- the subscriber should hold all his existing securities in demat form.
Duties of Shareholders:
- Every holder of securities of an Unlisted Public Co., who intends to transfer such securities on or after 2nd October, 2018, shall get such securities in demat form before the transfer; or
- Shareholder, who subscribes to any securities of an Unlisted Public Co. (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 demat form before such subscription.
Points to be kept in mind:
- Physical transfer of securities is allowed up to 1st October, 2018, thereafter share transfer cannot take place in physical mode. Only transfer of shares in through demat accounts shall be allowed.
- The provisions of following acts/regulations apply to dematerialization of Securities of unlisted public companies
- Depositories Act, 1996
- The SEBI (Depositories and participants) Regulations, 1996 and
- SEBI (Registrars to issue and share transfer agents) Regulations, 1993
HALF YEARLY COMPLIANCE TO BE FILED WITH ROC
The unlisted public companies are required to conduct Audit under Regulation 55A of SEBI (Depositories and participants) Regulations, 1996 and the Report shall be submitted on half yearly basis to the Registrar under whose jurisdiction the Registered Office of the Company is situated.
Benefits of Dematerialization of Securities:
- Elimination of risks associated with physical certificates such as loss, theft, mutilation, fraud etc.
- Improving the corporate governance system by increasing transparency and preventing mal-practices such as benami shareholding, back dated issuance of shares, etc.
- Exemption from payment of stamp duty on transfer.
- Ease in transfer, pledge etc. of securities.
Notification can be downloaded from the following Link: http://www.mca.gov.in/Ministry/pdf/CompaniesProspectus3amdRule_10092018.pdf
Update Shared by:
Lalit Rajput, Company Secretary
Outcome Solutions & Services LLP.