MCA asks every unlisted public companies to demat shares

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

Every unlisted public company shall –

(a) issue the securities only in dematerialised form; and
(b) facilitate dematerialisation of all its existing securities

Additional pre-requisite while issuing or buying back, shares or securities:

1.Entire holding of securities by promoters, Director & key managerial personnel should be in demat form

2.The unlisted public company cannot issue/Buy back offer, for the following defaults:-

a. Non-Payment of demat admission/annual fees

b.Non-maintenance of 2 years fee as security deposit with the depository

c.Not complied with regulations or directions or guidelines or circulars, issued by SEBI or Depository from time to time

3. The subscribers or any holders of existing securities are to be held in demat form

Half yearly compliance to be filed with ROC:

The audit report  under regulation 55A of the securities Depositories  Regulations shall  be submitted by the unlisted public company on a half-yearly basis to the ROC.