Under amendments to the Companies (Prospectus and Allotment of Securities) Rules, private companies other than small companies must issue securities only in dematerialised form and facilitate demat of existing securities by the prescribed deadline. The company appoints a registrar and transfer agent, obtains an ISIN from NSDL and CDSL, and shareholders open demat accounts to convert physical shares.
Who must comply
Private companies that are not small companies as per the Companies Act definitions, with exemptions for certain categories.
Process
- Appoint an RTA.
- Sign agreements with NSDL and CDSL.
- Obtain ISIN.
- Shareholders submit demat requests.
- Update registers.
Consequences
Non-compliant companies face restrictions on issuing securities and share transfers.
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Get expert help →Costs
Depository fees, RTA fees and ISIN charges.
Frequently asked questions
Do small companies need to dematerialise?
Small companies are exempt under the rule.
Can shareholders keep physical shares?
Transfers and new issues require demat form; shareholders are expected to convert.
What is ISIN?
International Securities Identification Number for the company's securities.
Has the deadline been extended?
Deadlines have been revised; check the latest MCA notification.
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