Ministry of Corporate Affairs earlier brought into existence a new rule with effect from 10th September 2019 which mandates the issue of new securities by unlisted public companies in dematerialised form. These rules also placed restrictions on the transfer of existing securities in dematerialised form only. Judicially it is a welcome to step to reduce the burden of courts and partially it is an additional cost. The rule was amended twice since its inception. Let us discuss.
The government inserted a new Rule 9A to the Companies (Prospectus and Allotment of Securities) Rules, 2014 vides notification G.S.R. 853(E) dated 10th September 2019. The Rule came into effect with effect from 2nd October 2018. With recent amendment vide Notification G.S.R. 376(E) dated 22nd May 2019 introduced a half yearly return called Reconciliation of Share Capital Audit Report (Half-yearly).