Impact of the Revised Definition of “Small Company” on Private Companies That Have Already Obtained an ISIN Prior to the Amendment (Effective 1 December 2025)
A recurring query pertains to the status of dematerialization requirements for private companies which had obtained an ISIN under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014, prior to the enforcement of the revised definition of a “Small Company”—i.e., paid-up share capital up to ₹10 crore and turnover up to ₹100 crore effective from 1 December 2025.
As per the statutory framework, the obligation to comply with Rule 9B arises only in the case of private companies which do not qualify as small companies. Pursuant to the amended thresholds, many entities that were previously classified as non-small shall, by operation of the revised definition, now fall within the ambit of small companies.
Upon such reclassification, the mandate of compulsory dematerialisation ceases to apply. Consequently, the ISIN earlier obtained—though valid— becomes optional rather than mandatory.
Accordingly:
1. Option to Surrender ISIN:
A private company newly classified as a small company may choose to surrender its ISIN, subject to the following conditions:
- All securities are fully rematerialised, and no shares remain in demat;
- There are no pending corporate actions (e.g., bonus issue, rights issue, buy-back, capital reduction) lodged or processed through depositories. Upon surrender of the ISIN, the company may continue to maintain its share capital and securities transactions entirely in physical form.
2. Option to Retain ISIN Voluntarily:
A small company may also opt to retain its ISIN on a voluntary basis. In such a case:
- The company is not required to file Form PAS-6, as the obligation to submit a half-yearly reconciliation of share capital applies only to companies to which Rule 9B is mandatorily applicable.
- The company may undertake all subsequent securities-related transactions in physical form, including transfer, transmission, allotment, and issuance of share certificates, at its discretion.
- Maintaining demat is permissible but entirely voluntary and does not impose additional statutory filing obligations, unless the company undertakes any voluntary corporate action through the depositories.
In summary, all private companies that fall within the revised definition of small company after 1 December 2025 may:
- surrender their ISIN and deal entirely in physical shares, or
- retain their ISIN voluntarily without any requirement to file PAS-6, while continuing to carry out transfers, allotments, and other share-related transactions in physical form.
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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Author Bio
Could you please clarify whether Rule 9B obligations get extinguished once triggered in an earlier FY? Since the amendment to the small-company definition is prospective, is there any statutory basis for surrendering ISIN or stopping PAS-6 filings after reclassification?
Mr Divesh. You article clarified my doubts. One of my client have applied and obtaind ISIN but none of the shareholders have sent their shares to DMAT so far. We shall discuss with STA and apply for surrender of ISIN. Thank you very much for the article.
KL Narasimham FCA Visakhapatnam