Listed Company vs Listed Entity — Why the Label Actually Matters
“Listed company” and “listed entity” may sound similar, but they lead to very different compliance obligations.
Under Section 2(52) of the Companies Act, 2013, a listed company is one that has any of its securities listed on a recognised stock exchange.
However, in 2021, Rule 2A was inserted into the Companies (Specification of Definitions Details) Rules. It clarified that companies (private or public) that list only NCDs or NCRPS via private placement are not considered “listed companies” under the Companies Act.
This means such companies are not treated as “listed companies” under the Companies Act — and therefore are not subject to listed-company specific compliance requirements such as:
- Appointment of independent directors (Section 149)
- Formation of audit and nomination & remuneration committees (Sections 177 and 178)
- Conducting a secretarial audit (Section 204) etc.
Note: Above provisions are applicable only to public companies that meet prescribed thresholds or are listed. Private companies are exempt from most of these unless otherwise specifically covered.
Therefore, if a private company has only listed debt securities (like NCDs/NCRPS) via private placement, and qualifies for exemption under Rule 2A, it is not a “listed company” under the Companies Act.
➡ It continues to comply as a normal private company.
However, under Regulation 2(1)(p) of SEBI (LODR), 2015, a listed entity includes any entity that has listed designated securities, which includes NCD or NCRPS.
So, a company (private or public) with only privately placed listed NCDs/NCRPS:
Not a “listed company” under the Companies Act → lighter governance obligations.
For instance, Section 203 (CS appointment) applies to listed companies or those with paid-up share capital of ₹10 crore or more. So, based on a literal reading, if a company is exempt under Rule 2A (i.e., debt-listed only) and its capital is below ₹10 crore, it may not be required to appoint a CS under the Companies Act.
- Still a “listed entity” under SEBI LODR thus,
- Must appoint a Company Secretary as Compliance Officer under Regulation 6 of LODR,
- And comply with all applicable LODR disclosure and reporting requirements.
Why it matters:
Reduces internal compliance under the Companies Act for companies that only list debt – helpful for SPVs or debt-only HoldCos.
Retains market transparency through SEBI LODR – Such companies still qualify as listed entities, so SEBI’s disclosure, filing, and CS appointment requirements continue to apply ensuring investor protection.
Aligns compliance with the nature of listing – Public equity holders need stronger governance. Debt investors (especially via private placement) need transparency, not control. This framework helps strike that balance.
PS: My views are personal and not a legal advice.
#Compaiesact #LODR #Listedentities
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