Key Company Law Amendments

• Every private company – other than a small company and a government company – shall issue the securities only in dematerialized form and facilitate dematerialization of all its existing securities, within 18 (eighteen) months of closure of the financial year ending on or after March 31, 2023, that is on or before September 30, 2024.
• Post September 30, 2024, each such company should ensure that before making an offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer, the entire holding of securities of its promoters, directors and key managerial personnel (KMP) has been dematerialized.
• Every security holder of such private company:
  • who intends to transfer securities post September 30, 2024, should get such securities dematerialized before the transfer;
  • who subscribes to any securities of such private company whether by way of private placement or bonus shares or rights offer post September 30, 2024, shall ensure that all his securities are held in dematerialized form before such subscription.

Warrant Conversion:

• Every public company which issued share warrants prior to the commencement of CA 2013 but has not converted them into shares is required to:
  • within 3 (three) months of the commencement of the amendment rules, inform the Registrar of Companies (RoC) about the details of such share warrants; and
  • within 6 (six) months of the commencement of the amendment rules, notify the bearers of such warrants on its website, if any, and by publication in newspaper(s) of the commencement of the amendment rules and requiring them to surrender their warrants to the company and get the shares dematerialized in their account.
• Bearers of share warrants referred to above are required to surrender them to the issuing company and get the shares dematerialized in their account.
• Where any bearer of share warrants does not surrender the same within the prescribed period, the company is required to convert such share warrants into dematerialized form and transfer the same to the Investor Education and Protection Fund.

• Every company must designate an individual who would be responsible for furnishing information to the RoC or any other authorized officer w.r.t beneficial interest in shares of the company – as required under section 89 of CA 2013. This individual could be a Company Secretary (CS) if there is any; or a KMP (other than CS); or in their absence every director of the Company.
• Every company must furnish the details of such designated individual in its annual return. In case there is any change in the designated person, the company shall intimate the same to the RoC.

• By virtue of this amendment, the MCA has permitted certain classes of (Indian) public companies to issue certain securities for the purpose of listing on permitted foreign stock exchanges.
• MCA has been entrusted with the authority to exempt any class(es) of above referred public companies from the applicability of the provisions of chapter III (Prospectus and Allotment of Securities), chapter IV (Share Capital and Debentures), section 89 (Declaration in respect of Beneficial Interest in any Share), section 90 (Register of Significant Beneficial Owners in a Company) or section 127 (Punishment for Failure to Distribute Dividends) of CA 2013.
• It is expected that MCA will soon issue rules – specifying the class of securities that public companies will be permitted to issue; the foreign jurisdictions where such listings will be permitted and outlining other additional conditions in this regard to give effect to this notification.

• MCA has permitted shifting of the registered office of a company whose management has been taken over by a new management pursuant to a resolution plan approved under section 31 of the Insolvency Bankruptcy Code, 2016 (IBC), provided that no appeal against the resolution plan is pending in any court or tribunal and no inquiry, inspection, investigation is pending or initiated after the approval of the said resolution plan.
• The provision empowering the Central Government (power delegated to concerned Regional Director) to impose costs when a company shifts its registered office from one State to another, stands omitted.