Team Blitz India
NEW DELHI: The Government has mandated all private companies, other than small companies, to dematerialise their shares by September 30, 2024. The move is expected to boost transparency and oversight of the financial system.
The Ministry of Corporate Affairs (MCA), in an amendment dated October 27, inserted a new clause in the Companies (Prospectus and Allotment of Securities) regulation, stating: “Issue of securities in dematerialised form by private companies: (1) every private company, other than a small company, shall within the period referred to in sub-rule (2) (a) issue the securities only in dematerialised form; and (b) facilitate dematerialisation of all its securities, in accordance with provisions of the Depositories Act, 1996 (22 of 1996) and regulations made there under.
“A private company, which as on the last day of a financial year, ending on or after March 31, 2023, is not a small company as per audited financial statements for such financial year, shall, within 18 months of closure of such financial year, comply with the provisions of this rule,” it reads.
If a company ceases to be ‘small’, it will have to dematerialise its shares within 18 months from the close of the financial year.
