In the recent amendment rules (3rd amendment rules), it has now become mandatory for all the unlisted public companies to issue and transfer their shares only in dematerialised forms.

If you have incorporated your company as a Public Company, then this compliance is necessary with effect from 2nd October 2018.

The reason for this step is to enhancing the transparency of hte function of the company, enhancing the protection of the investors and the elevating the governance of the corporate sector. To get the gist of it, the goal is to enhance the corporate governance standards through transparency

Courtesy of this amendment, the unlisted public companies are required to facilitate dematerialization of their securities. This has to be done in coordination with the depositors of the company and a share transfer agent. A share transfer agent is someone that the unlisted company has to appoint. It is this agent that is going to provide the public company with the Registrar and share transfer services.

If there are any issues with dematerialization, the IEPF Authority is going to be the one to handle it.

Vidhipatra legal solution is a team of professionals that entails a team of Company secretaries, Chartered Accountants and other professionals. Our acumen pertaining to company registration and compliance services makes us the perfect choice to be your Registrar & Transfer Agent.

Benefits of Dematerialization

• The unlisted public companies will be able to enjoy the following perks according to the MCA:
• As the certificated will be dematerialized, the risks that arise due to vulnerability of the physical copies like loss, theft, fraud and mutilation will be eliminated.
• Transparency will increase. This further will help with an improved governance system for the corporate industry. AS a result, be-nami shareholdings and other such malpractices will be curbed.
• There will be exemption with payment associated with stamp duty.
• As the entire equity portfolio will be digitized, the transfer and other matters like pledging of securities can be dealt with easily.

Eligibility Criteria for Dematerialization of Shares in India

Following is what constitutes as the eligibility criteria to dematerialize the shares:

• The share distribution should not be disputed. 
• The application should be filed on time.