MCA Update: Extension of Due Date for Private Companies to Dematerialize their Securities
The Ministry of Corporate Affairs (MCA), vide notification dated February 12, 2025, has amended the Companies (Prospectus and Allotment of Securities) Rules 2014, to extend the deadline for dematerialization of securities by Private Companies in India until June 30, 2025.
As per the erstwhile notification from the Ministry, every private company (which is not a small company as on last day of the financial year, ending on or after 31 March 2023), was required to facilitate the dematerialization of all securities by September 30, 2024. After this date, corporate actions, such as issuing fresh capital or transferring shares, were restricted until the existing securities are dematerialized.
With the given extension, private companies (except small companies) can complete the dematerialization of securities and do the corporate actions until June 30, 2025 without any restriction.
As the process for dematerialization of securities is documentation-intensive and a significant restriction for companies when planning corporate actions such as issuing further capital or facilitating share transfers by the shareholders, this extension provides a much-needed opportunity for both companies and stakeholders. It allows additional time for businesses to comply with the process and plan corporate actions effectively before June 30, 2025.
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