Why Having ISIN Is Essential Instead of Surrendering—Even Under the Revised Small Company Definition
The Ministry of Corporate Affairs (MCA) recently revised the definition of a Small Company, increasing the thresholds to paid-up share capital ≤ ₹10 crore and turnover ≤ ₹100 crore. This change has provided welcome compliance relief for many companies that now qualify under the updated criteria.
However, with this relaxation, some companies are considering surrendering or withdrawing their ISIN, assuming the revised status reduces the need for it. While this may seem like a convenient move, having an ISIN remains essential, and surrendering it could create more problems than it solves.
Understanding the Revised Thresholds
The new thresholds allow a significant number of companies to enjoy simplified compliance procedures and reduced reporting burdens. Naturally, promoters and their advisors may look for ways to further streamline compliance and governance frameworks.
This has led to questions about whether an ISIN is still necessary, especially for companies that may not be mandatorily required to maintain it under the revised thresholds (effective 1st December 2025). But such thinking undermines the long-term strategic value of retaining an ISIN and can be short-sighted when a company’s identification and future opportunities are considered.
Why Companies Consider Surrendering Their ISIN
Some common reasons include:
- “We don’t issue securities anymore.”
While companies may not issue securities frequently, even small or private companies can issue shares, debentures, rights, or ESOPs. An ISIN ensures proper identification of these securities. - “We’re a small company now, so compliance is relaxed.”
Reduced compliance does not reduce the strategic usefulness of an ISIN. - “It will save costs.”
Any cost savings from surrendering an ISIN are marginal, while reapplying later can be time-consuming and expensive.
Why Having Your ISIN Is Still Essential
1. A Permanent Corporate Identifier for Your Securities
An ISIN provides your company’s securities with a globally recognized identity, supporting transparency, traceability, and credibility. Even small companies benefit from maintaining structured, identifiable securities records.
2. Future Fundraising Becomes Effortless
Even if your company doesn’t plan to raise funds immediately, situations may change—a new investor, an ESOP plan, or a preference share issue may arise.
Reapplying for an ISIN later involves:
- Regulatory paperwork
- Longer processing time
- Additional compliance scrutiny
Retaining the existing ISIN avoids these roadblocks and keeps your company ready for opportunities.
3. Better Governance and Record-Keeping
An ISIN helps maintain a clear cap table and securities history. With an ISIN:
- Corporate actions are easier to document
- Past issuances are easy to track
- Auditors and regulators gain clearer visibility
This improves governance and reduces errors.
4. Investor Confidence and Professional Image
Maintaining an ISIN signals stability and preparedness. Surrendering it may give the impression that the company:
- Is stepping backward
- Lacks long-term planning
- Is not ready for future capital activities
A retained ISIN builds confidence among investors, stakeholders, and partners.
5. Avoiding Re-Issuance Hurdles Later
Once surrendered, reissuing an ISIN is often complex. It may require:
- Re-verification of corporate documents
- Updated shareholding records
- Fresh approvals
- Additional compliance steps
Companies frequently regret surrendering their ISIN when sudden fundraising or restructuring opportunities arise.
Conclusion
The revised definition of a Small Company certainly provides significant compliance relief. However, withdrawing your ISIN is not a wise step, even if it appears convenient initially.
Retaining your ISIN ensures your company remains prepared, compliant, credible, and flexible for future opportunities. Regardless of company classification, having an ISIN is still essential—and surrendering it is a decision companies often end up reversing later.
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