The Ministry of Corporate Affairs vide notification dated.10.09.2018 had introduced a new set of compliance regime for Unlisted Public Companies under Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018 by inserting a new sub rule 9A after the existing Rule .

Benefits  entailed

1.  Transparency

2. Protection of the interest of the Investors

3. Good Corporate Governance

4. Elimination of payment of stamp duty when effecting transfers.

5.  Risk of theft, fraud, duplication of physical shares will be grounded to zero.

6. Ease in the transfer of securities.

7. Backdating/ stamping of securities eliminated

8. Greater transparency

9. All other kinds of malpractices shall be curbed.


The Rules are applicable to every Unlisted Public Company wef 02.10.2019.

Such Companies have to ensure that their:

A) securities shall be issued only in demat form and

B)  that all the existing securities are dematerialized.

Such Unlisted public Companies shall get their securities dematerialized by:

A) registering the Company with some Depository Participant according to the provisions of the Depository Act, 1996.

B) obtaining the International Securities Identification Number (ISIN) for each type of Security.

C) informing its members about the ISIN and facilitating its members in getting their Securities dematerialized.

Impact on the company  and  its  shareholders

Such Companies henceforth wef 02.10.2019 will not be able to :

1. Effectuate transfers of securities

2. Issue any type of Securities

3. Buyback of shares

4. Bonus shares shall not be issued

5. Rights issue cannot be made.

Compliance  requirements

Such Companies will have to comply with the following requirements :

a) Make timely payment of fees (one time and annual)

b) Maintain  a two years security deposit as per the Agreements executed with the Depository Share Transfer Agent Registrar to the issue (RTA)

c) Comply with the requirements issued from time to time, if any by SEBI and/ or Depository.

d) Half yearly Audit Report as per the prescribed proforma prescribed under Regulation 55A of the SEBI needs to be submitted with the Registrar of Companies under whose jurisdiction the registered office is located.

Since no form is prescribed for filing, thus. such prescribed proforma will be filed through GLN2. However, the MCA is silent with respect to the date by which such Audit report needs to be filed with the concerned ROC. In the absence of any information, it is assumed that the submission time limit of 30 days will be reckoned from the date on which the report needs to be prepared as per the compliance provisions of SEBI.

Thus, for Unlisted Public Companies, the compliance chart would be as under:

Due date for filing To be filed by
31st March 30th April
30th September 30th October

Grievance redressal

The grievances shall be addressed to Investor and Education Protection Fund (IEPF) who shall initiate appropriate action in consultation with the :

  • Depository
  • Registrars to the Issue
  • Share Transfer agent
  • Depository Participant

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For a deeper insight into the matter as to how it can affect your business, please consult the writer.

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  1. D B DHOLAKIA says:

    The Notification and Rules refer 2nd October-2018 whereas in your article the effective date is mentioned as 2nd October-2019, which one is correct?

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