✅ MCA has mandated private cos. (which are not Small Cos.) to issue securities (not just ‘shares’) only in demat form and facilitate demat process for all its securities.
✅ Presently, said provisions are applicable to unlisted public companies.
✅ Now, the said provision is applicable to cos. other than Small Cos., which includes: Foreign subsidiary Co., Domestic subsidiary Co., Section 8 Cos., domestic holding Co., Cos. governed by any special Act
✅ The said applicable Private Cos. shall comply with the said provisions by September 30, 2024 (18 months from March 31, 2023).
✅ The said Cos. shall ensure that entire holding of securities of its promoters, directors, Key Managerial Personnel have been dematerialised before making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer.
✅ The provisions ought to have been applicable from the date of notification, as 7 months out of 18 months are already over. Section 8 Companies and wholly-owned subsidiary companies ought to have been exempted from this amendment.
✅ Now, the stamp duty on issue and transfer of securities for such companies shall be in accordance with June 2020 notification, which provides for payment and collection of stamp duty. One-time and on-going cost of compliance would be another factor for this amendment.
MCA notified Companies MGT Amendment Rules.
1) Every Co is required to designate a person (DP) under SBO.
2) CS/MD/KMP/Director can be DP
3) Company shall inform the details of same in Annual Return
4) Changes to be intimated in GNL2
MCA amended PAS (Return of Allotment) Rules
1) Details of non converted Share Warrant to be submitted in PAS 7
2) Private Companies except small companies are required to have shares in DEMAT within 18 months from closure of FY 23.
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