ARTICLE
13 September 2024

New PAS 6 Compliance For Private Companies – Effective September 30, 2024

SS
Singhania & Partners LLP

Contributor

Singhania & Partners is a full-service law firm with offices in Delhi- NCR, Bengaluru, Hyderabad and Gurugram. The firm assists clients in domestic and international dispute resolution, project finance, M&A, employment and intellectual property areas. It is the Indian member of TerraLex, Inc. (USA) which is a global network of 600+ Law Firms offices in 100+ countries.
The Ministry of Corporate Affairs (MCA), through its notification dated October 27, 2023, has amended the Companies (Prospectus and Allotment of Securities) Rules...
India Corporate/Commercial Law

The Ministry of Corporate Affairs (MCA), through its notification dated October 27, 2023, has amended the Companies (Prospectus and Allotment of Securities) Rules, 2014, to introduce a new Rule 9(B) – Issue of Securities in Dematerialised Form by Private Companies. This amendment mandates private companies to comply with new regulations regarding the dematerialisation of their securities.

Applicability of Rule 9(B)(5)

Under Rule 9(B)(5), the provisions of sub-rules (4) to (10) of Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014, now apply to the dematerialisation of securities for private companies. This alignment of rules brings private companies under the regulatory framework that governs the issue of securities in dematerialised form.

Key Compliance Requirements for Private Companies

As per Rule 9(B)(5), read in conjunction with Rule 9A(5) and Rule 9A(8), every private company must meet the following compliance obligations:

  1. Obtain an ISIN (International Securities Identification Number): Private companies must obtain an ISIN from a Registrar & Transfer Agent. The ISIN is a unique code assigned to each security, essential for its identification and dematerialisation. Additionally, companies must notify all existing security holders about the availability of this facility.
  2. Filing of e-Form PAS 6: Private companies are also required to file e-Form PAS 6 with the MCA. This form must contain detailed information on the number of shares held in both dematerialised and physical form. The form acts as a reconciliation report for share capital, ensuring that any discrepancies between physical and dematerialised holdings are addressed.

Filing Timeline for e-Form PAS 6

  • For the period ending March 31st – e-Form PAS 6 must be filed by May 29th of the same year.
  • For the period ending September 30th – e-Form PAS 6 must be filed by November 28th of the same year.

The deadline for obtaining an ISIN is set for September 30, 2024 (subject to any extensions). After obtaining the ISIN, the first filing of e-Form PAS 6 will be due by November 28, 2024, for private companies that have secured their ISIN on or after March 31, 2024. However, if a private company has obtained the ISIN on or before March 31, 2024, it is recommended that the company also files e-Form PAS 6 for the period ending March 31, 2024, to ensure compliance.

Purpose and Impact of Filing e-Form PAS 6

In our view, the purpose of filing e-Form PAS 6 is to ensure a transparent and accurate reconciliation of the share capital audit. It enables the company to furnish a comprehensive bifurcation of securities held in physical and dematerialised form. This requirement is expected to improve corporate governance, streamline the tracking of securities, and ensure regulatory compliance regarding the dematerialisation process.

By adhering to these updated regulations, private companies will align with the broader objective of the MCA to promote digitisation and transparency in corporate practices, while also ensuring the integrity and accuracy of shareholding records.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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