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Corporate Laws Central Ministry of Corporate Affairs Companies Act, 2013

Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023

27-Oct-2023 | G.S.R. 802(E)

The Ministry of Corporate Affairs has issued the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 further to amend the Companies (Prospectus and Allotment of Securities) Rules, 2014


Key amendments -

1. Compulsory demat of share of large private companies- The new Rule 9B mandates that private limited companies that are not small companies as the financial year ended on March 31, 2023, are required to get their shares in demat mode, within 18 months from the closure of the said financial year. Once dematerialisation process is complete, all offer and transfer of securities shall be done in dematerialized mode only. Further, the company must facilitate the dematerialisation of all its securities in accordance with the provisions of the Depositories Act. These provisions shall not apply to Government companies.

2. Compulsorily conversion of share warrants not converted into shares for public companies: Every public company that had issued warrants under the erstwhile Companies Act, 1956 shall:

(a) Inform ROC about the details of such share warrants in Form PAS-7 within 3 months of this notification;

(b) Within six months of the commencement of this rules, require the warrant bearers to surrender the warrants and get the shares dematerialized in their account. The company shall also place a notice for the bearers of share warrants in PAS-8 on the Company's website and publish a newspaper advertisement.

(c) In case any warrant bearer does not surrender their share warrants, the company shall convert such share warrants into dematerialised form and transfer the same to the IEPF under section 125 of the Act.

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