| Rules | Companies (Prospectus and Allotment of Securities) Rules, 2014. | Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023. | Comments |
| Rule -9 Dematerialisation of securities | The promoters of every public company making a public offer of any convertible securities may hold such securities only in dematerialised Form Provided that the entire holding of convertible securities of the company by the promoters held in physical form up to the date of the initial public offer shall be converted into dematerialised form before such offer is made and thereafter such promoter shareholding shall be held in dematerialized form only. | Every public company which issued share warrants prior to commencement of the Companies Act, 2013 and not converted into shares shall, – (a) within a period of three months of the commencement of the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 inform the Registrar about the details of such share warrants in Form PAS-7; and (b) within a period of six months of the commencement of the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023, require the bearers of the share warrants to surrender such warrants to the company and get the shares dematerialised in their account and for this purpose the company shall place a notice for the bearers of share warrants in Form PAS-8 on the website of the company, if any and shall also publish the same in a newspaper in the vernacular language which is in circulation in the district and in English language in an English newspaper, widely circulated in the State in which the registered office of the company is situated. (3) In case any bearer of share warrant does not surrender the share warrants within the period referred to in sub-rule (2), the company shall convert the such share warrants into dematerialised form and transfer the same to the Investor Education and Protection Fund established under section 125 of the Act | The Amendment introduces changes for public companies that had previously issued share warrants before the commencement of the Companies Act, 2013. These companies are required to take specific actions within specified timelines: Within three months of the Amendment’s commencement, public companies must inform the Registrar about the details of such share warrants using Form PAS-7. Within six months of the Amendment’s commencement, these companies must request bearers of the share warrants to surrender them and get the shares dematerialized. This requirement involves placing a notice on the company’s website and publishing the same in local and English newspapers. Failure to surrender the share warrants results in their conversion into dematerialized form and transfer to the Investor Education and Protection Fund. |
| Rule 9B-Issue of securities in dematerialised form by private companies: Newly Inserted | (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 and regulations made thereunder. (2) A private company, which as on last day of a financial year, ending on or after 31st March, 2023, is not a small company as per audited financial statements for such financial year, shall, within eighteen months of closure of such financial year, comply with the provisions of this rule. (3) Every private company referred to in sub-rule (2) making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer, after the date when it is required to comply with this rule, shall ensure that before making such offer, entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised in accordance with the provisions of the Depositories Act, 1996 (22 of 1996) and regulations made thereunder. (4) Every holder of securities of the private company referred to in sub-rule (2),- (a) who intends to transfer such securities on or after the date when the company is required to comply with this rule, shall get such securities dematerialised before the transfer; or (b) who subscribes to any securities of the concerned private company whether by way of private placement or bonus shares or rights offer on or after the date when the company is required to comply with this rule shall ensure that all his securities are held in dematerialised form before such subscription. (5) The provisions of sub-rules (4) to (10) of rule 9A shall, mutatis mutandis, apply to the dematerialisation of securities under this rule. (6) The provisions of this rule shall not apply in case of a Government company | Private companies, except small companies, must issue securities only in dematerialized form Companies that are not small companies as per their audited financial statements for the financial year ending after 31st March 2023 must comply with these rules within eighteen months of that financial year’s closure Private companies falling under these rules must ensure that the entire holding of securities of their promoters, directors, and Key Managerial Personnel has been dematerialized before any offer for the issuance of securities, buyback of securities, or the issuance of bonus shares or rights offers. They must facilitate the dematerialization of all their securities as per the provisions of the Depositories Act, 1996, and related regulations. | |
| After the Form PAS-6 the form PAS 7 and PAS-8 is inserted |
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