NCLAT: IRP Has Authority to Take Possession of Assets Owned by Corporate Debtor  ||  NCLAT: NCLT Can Direct Forwarding a Copy of its Order to Relevant Statutory Authorities  ||  Delhi HC: Centre to Expedite Process of Accessibility Features in OTT platforms for PwDs  ||  Delhi HC: Once Worker Provides Testimony Under Oath ‘Burden of Proof’ Shifts on Employer  ||  SC: There Cannot be Discrimination in Matter of Payment of Pension to Retired Judges  ||  SC: India is Not a Dharamshala that Can Entertain Foreign Nationals from All Over  ||  SC: Can Quash Domestic Violence Act Complaints Under Section 482 of CrPC  ||  Supreme Court: Can’t Use Statement of One Accused against Another  ||  SC: Inclusion of Name in Draft NRC Cannot Annul Foreigners Tribunal’s Declaration as Non-Citizen  ||  Supreme Court: Minimum Practice of 3 Years Mandatory to Enter Judicial Service    

MCA mandates issue & transfer of shares in dematerialised form only - (11 Sep 2018)

Company

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. In order to enhance transparency, investor protection and governance in the corporate sector and further to curb menace of black money, the Ministry has taken this decision. Rules under the Companies Act, 2013, would be amended with respect to having shares in the demat form accordingly. The Ministry is primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law.

According to the MCA, the major benefits of dematerialisation of securities which will now be available to unlisted Public companies includes elimination of risks associated with physical certificates such as loss, theft, mutilation, fraud etc. Improvement of corporate governance system by increasing transparency and preventing mal-practices such as benami shareholding, back dated issuance of shares, etc. Unlisted Public companies would be exempted from payment of stamp duty on transfer. There would be Ease in transfer, pledge etc. of securities. Further, it would also strengthen the Know Your Client (KYC) framework for unlisted companies and prevents instances such as pledging of duplicate shares.

As per the reports, Unlisted Public Companies are expected to facilitate the dematerialisation of their securities in co-ordination with Depositories and Share Transfer Agents. Any grievances arising out of such Dematerialization of securities will be handled by the Investor Education and Protection Fund (IEPF). Authority looks after investors’ awareness and protects interests of investors. The measure is expected to significantly enhance the Corporate Governance standards in the country.

Tags : SHARES   DEMAT FORM   MANDATORY  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved