Dematerialisation of Shares of Unlisted Public Companies

The Ministry of Corporate Affairs (‘MCA’) had notified that with effect from April 1, 2019, issue of further shares and transfer of all shares by unlisted public companies shall be in dematerialised form only. The rule, Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018, requires the unlisted public companies to dematerialise their securities in coordination with Depositories and Share Transfer Agents. This change would lead to significant enhancement of the corporate governance standards in the country.

Here we discuss the process and benefits of dematerialisation of shares.

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