Govt directs all private companies, other than small companies, to dematerialise their shares

Govt directs all private companies, other than small companies, to dematerialise their shares by Sept 30, 2024

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The MCA has introduced mandatory dematerialization of securities for private companies through the Companies Act 2013. This rule applies to all private companies, except small and government companies, and must be complied with by September 30, 2024. If a company ceases to be small after March 31, 2023, the 18-month timeline starts from the end of the financial year when it loses its small company status. Private companies are required to issue and facilitate the dematerialization of all their securities, and they should apply for dematerialization and obtain ISIN for each type of security. Small companies are defined as those with paid-up share capital not exceeding Rs. 4 crores and turnover not exceeding Rs. 40 crores, with some exceptions such as holding companies, subsidiaries, companies under special Acts, and section 8 companies.