{"id":2204,"date":"2022-02-10T05:21:34","date_gmt":"2022-02-10T05:21:34","guid":{"rendered":"https:\/\/www.akgvg.com\/blog\/?p=2204"},"modified":"2022-02-11T05:27:13","modified_gmt":"2022-02-11T05:27:13","slug":"the-consequences-of-unlisted-public-companies-not-dematerialising-shares","status":"publish","type":"post","link":"https:\/\/www.akgvg.com\/blog\/the-consequences-of-unlisted-public-companies-not-dematerialising-shares\/","title":{"rendered":"The consequences of unlisted public companies not dematerialising shares"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2206\" src=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/The-consequences-of-unlisted-public-companies-not-dematerialising-shares.jpeg\" alt=\"The consequences of unlisted public companies not dematerialising shares\" width=\"1000\" height=\"1000\" srcset=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/The-consequences-of-unlisted-public-companies-not-dematerialising-shares.jpeg 1000w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/The-consequences-of-unlisted-public-companies-not-dematerialising-shares-300x300.jpeg 300w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/The-consequences-of-unlisted-public-companies-not-dematerialising-shares-150x150.jpeg 150w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/The-consequences-of-unlisted-public-companies-not-dematerialising-shares-768x768.jpeg 768w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/The-consequences-of-unlisted-public-companies-not-dematerialising-shares-230x230.jpeg 230w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.akgvg.com\/blog\/the-consequences-of-unlisted-public-companies-not-dematerialising-shares\/#Introduction\" >Introduction<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.akgvg.com\/blog\/the-consequences-of-unlisted-public-companies-not-dematerialising-shares\/#Rule_9A_Issue_of_securities_in_dematerialized_form_by_unlisted_public_companies_%E2%80%93\" >Rule 9A: Issue of securities in dematerialized form by unlisted public companies: &#8211;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Ministry of Corporate Affairs has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014,and now has inserted a new Rule 9A with its applicability from 2<sup>nd<\/sup> October 2018.With the insertion of the new rule,every unlisted Public Company must providean opportunity to every shareholder to convert their shareholding into Dematerialized form.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Rule_9A_Issue_of_securities_in_dematerialized_form_by_unlisted_public_companies_%E2%80%93\"><\/span>Rule 9A: Issue of securities in dematerialized form by unlisted public companies: &#8211;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Every unlisted public company shall \u2013<\/li>\n<\/ul>\n<p>(a) issue the securities only in dematerialized form; and<\/p>\n<p>(b) facilitate dematerialization of all its existing securities<\/p>\n<p>by provisions of the Depositories Act, 1996 and regulations made thereunder.<\/p>\n<ul>\n<li>As the rule 9a (3) EverySecurity Holder of an Unlisted Public Company before transferring their share on and after 2<sup>nd<\/sup> October 2018 must convert its securities only in dematerialized form<\/li>\n<li>In the same way if anyone wants to subscribe to any securities of an unlisted public company (whether by way of private placement or bonus shares or rights offer) on or after 2nd October 2018 shall dematerializetheir existing security into dematerialized.<\/li>\n<li>To provide the facility to every security holder forhaving their securities in Dematthe company will secure an International Security Identification Number (ISIN) for each type of security and shall inform all its existing security holders about such facility.<\/li>\n<\/ul>\n<p>Audit Report<\/p>\n<p>As per Rule 9A (8) the unlisted public company hassubmittedtheir audit report by regulation 55A of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 on a half-yearly basis to the Registrar under whose jurisdiction the registered office of the company is situated.<\/p>\n<p>The Unlisted Public Company have to submit their Reconciliation of share capital audit report within 30 days from the end of the Half Year.\u201d<\/p>\n<p>CONSEQUENCES<\/p>\n<p>If the company fails to provide or secure an International Security Identification Number (ISIN) for each type of securityor submit their Audit Report,then the company will be punishable according to section 450 of the Companies Act.<\/p>\n<p>As Rule 9a does not specify any penalty or fine, Section 450 applies.As the section specify that if no penalty\/fine is prescribed in any rules or section then Section 450 of the Companies Act will be applicable.<\/p>\n<p>The company and every officer of the company who is in default or such other person shall be punishable with a fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2205\" src=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/Capture.png\" alt=\"\" width=\"821\" height=\"163\" srcset=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/Capture.png 821w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/Capture-300x60.png 300w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/02\/Capture-768x152.png 768w\" sizes=\"auto, (max-width: 821px) 100vw, 821px\" \/><\/p>\n<p>If the Shareholder fails to convert its share into Demat as aconsequence of it, they will not be able to transfer their share until and unless they convert their share into Demat.<\/p>\n<p>This content is meant for information only and should not be considered as advice or legal opinion, or otherwise. <a href=\"https:\/\/www.akgvg.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>AKGVG &amp; Associates<\/strong><\/a> does not intend to advertise its services through this.<\/p>\n<p>Posted by:<\/p>\n<p>CS Neetu Saini<\/p>\n<p>AKGVG &amp; Associates<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction The Ministry of Corporate Affairs has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014,and now has inserted a new Rule 9A with its applicability from 2nd October 2018.With the insertion of the new rule,every unlisted Public Company must providean opportunity to every shareholder to convert their shareholding into Dematerialized form. Rule 9A:&#8230;<\/p>\n","protected":false},"author":1,"featured_media":2206,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120],"tags":[479],"class_list":["post-2204","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-secretarial-services","tag-secretarial"],"_links":{"self":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/2204","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/comments?post=2204"}],"version-history":[{"count":3,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/2204\/revisions"}],"predecessor-version":[{"id":2209,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/2204\/revisions\/2209"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media\/2206"}],"wp:attachment":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media?parent=2204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/categories?post=2204"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/tags?post=2204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}