The Ministry of Corporate Affairs has amended certain rules under the Companies Act, 2013 and the Limited Liability Partnership Act, 2009. A brief description of the changes are set out below:
Every Company to have a designated person for providing information to the ROC in relation to beneficial interest in shares of the company [1]
Every company is required to designate a person who shall be responsible for providing information to the Registrar of Companies (“ROC”) with respect to beneficial interest in shares of the company. The company may designate the following persons for providing such information:
- a Company Secretary, if mandatorily required to be appointed by the company; or
- a Key Managerial Personnel, other than the Company Secretary; or
- every Director, if there is no Company Secretary or Key Managerial Personnel.
You can access the Notification here.
Share warrants issued by public companies to be surrendered to the Company and be dematerialised[2]
Every public company which issued share warrants prior to commencement of the Companies Act, 2013 and has not converted such share warrants into shares, shall inform the ROC within a period of 3 months of the commencement of the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 and requires the bearers of such share warrants to surrender the warrants to the company and get the shares dematerialised in their account within a period of six months of the commencement of the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023.
Issue of securities in dematerialised form by private companies[3]
Every private limited company (except a small company) shall issue any securities only in dematerialised form and facilitate dematerialisation of all its securities within 18 (eighteen) months from March 31, 2023, i.e. October 1, 2024. In the meantime, if a private company seeks to make any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer, it is required to ensure that before making such offer, entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised.
Further, every holder of securities of a private company, (a) who intends to transfer securities is required to get such securities dematerialised before the transfer; or (b) who subscribes to any securities of a private company whether by way of private placement or bonus shares or rights offer shall ensure that all his securities are held in dematerialised form before such subscription.
You can access the Notification here.
Public companies are now permitted to list their securities on permitted stock exchanges[4]
Public companies are now permitted to list their securities on permitted stock exchanges in permissible foreign jurisdictions. The detailed rules for such listings are yet to disclosed.
You can access the Notification here.
LLP to maintain a register of partners and the person whose name is entered in the register of partners but does not hold any beneficial interest[5]
Rule 22A and 22B has been inserted in the Limited Liability Partnership Rules, 2009. The said insertion mandates a limited liability partnership firm to maintain a register of partners in form 4A and the person whose name is entered in the register of partners but does not hold any beneficial interest fully or partly in contribution, such person shall file a declaration within 30 (thirty) days from the date on which his name is entered in the register of partners.
You can access the Notification here.
For more information about the aforesaid developments you may write to us at: solutions@bridgeheadlaw.com.
Karan Narvekar | Partner
Sunny Nirmal | Associate
Views expressed are personal to the authors and do not constitute as legal advice.
[1] Companies (Management and Administration) Second Amendment Rules, 2023
[2] Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023
[3] Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023
[4] Notification dated October 30, 2023
[5] Limited Liability Partnership Rules, 2009
