Friday, 17 February 2023

Complete Details on Form PAS-6 For Unlisted Public Companies

Form PAS-6 (Reconciliation of Share Capital Audit Report on a Half-Yearly Basis), which is primarily used for the reconciliation of the Share Capital Audit Report on a Half-Yearly Basis, has been established by the MCA (Ministry of Corporate Affairs).

Form PAS-6 is adopted in obedience to the sub-rule (8) of rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 which was modified vide Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019.

Let's explore Rule 9A of the 2019 Companies (Prospectus and Allotment of Securities) Third Amendment Rules in more depth. The law specifies that.

All Unlisted Public Companies Must:

  • Only Demat form of the securities shall be issued, and
  • Convert all of its current physical securities to Demat in accordance with the provisions of the Depositories Act of 1996 and its implementing regulations.
  • demat of all of its current securities by submitting the required application to a depository.
  • each form of security should secure an ISIN and
  • shall provide such facility's details to all of its current security holders.
All the Unlisted Public Companies Before Making-

  • Issue of securities, or 
  • Buyback of any securities, or 
  • Bonus Issue, or 
  • Right Issue

Must Dematerialize all of its Promoters, Directors, and KMP's Securities.

Every Shareholder of an Unlisted Company-
  • anybody seeking to transfer such securities on or after October 2, 2018
  • Whoever desires to purchase stocks from an unlisted public business on or after October 2, 2018, must do so.
Should be sure that before making such a subscription, he holds all of his current securities in dematerialized form.


Additionally, any Unlisted Public Company Must Make Sure That:
  • It pays fees (annual and admission) to the depository and the Registrar & Share Transfer Agent on time and in accordance with the parties' signed agreement;
  • It keeps a security deposit in the depository, in the form that the parties may agree upon, of at least two years' worth of fees at all times;
  • Follows any rules, directives, guidelines, or circulars, if any, issued by the Depository or SEBI with regard to the dematerialization of shares of unlisted public firms.
No Unlisted Public Firm That has Violated Sub-Rule (5) Shall:
  • Issue of securities, or 
  • Buyback of any securities, or 
  • Bonus Issue, or 
  • Right Issue

Until the Money is Paid to the Depositories, Registrar and Transfer Agent.

The unlisted public company must submit the Reconciliation of Share Capital Audit Report (in form PAS-6) required by sub-rules (8) and (8A) of rule 9A Companies (Prospectus and Allotment of Securities Rules, 2014, every six months to the Registrar whose jurisdiction the registered office of the company is located. The report must be duly certified by a company secretary in practice or a chartered accountant in practice. 

Additionally, the corporation must notify the depositories right once of any discrepancy between its issued capital and the capital maintained in dematerialized form.


Important Information to Include on e-Form PAS-6:
  • Securities ISIN (International Securities Identification Number)
  • Period of Return Filing
  • Company capital details as per the format

The distinction with cause if there is any in the points (a) and (e),

Changes in share capital, if any, for every particular issue during the previous six months;
  • Right Issue,
  • Bonus Issue,
  • Private Placement,
  • ESOPs,
  • Amalgamation,
  • Conversion,
  • Buy back,
  • Capital Reduction,
  • Forfeiture,
  • any other.
*It should be noted that Form PAS-6 must include the share numbers and other pertinent information that must be communicated to the NSDL/CDSL.
  • Complete information on the shares owned in physical or dematerialized form by the Promoters, Directors, and KMP.
  • Information about the updating of the member registration
  • Information on excess dematerialized shares over the past six-month period, along with the cause
  • Total number of dematerialization requests information, together with the cause of any delays that have lasted more than 21 days.
  • Business information about the secretary (If any),
  • Information about the qualified professionals who certified the form
  • Information about the choice of a common agent for share registry work
It should be emphasized that all necessary information must be provided within 60 days of the financial year with individual ISINs' half-years ending on September 30 and March 31.

Role About Registrar & Share Transfer Agent:

The Registrar serves as an intermediary between the Issuer, which is the Company that chooses to dematerialization, and the Depository to accomplish a variety of RTA Services, including Dematerialization, Rematerialization, Initial Public Offerings (IPOs), and Corporate Actions like IPOs (Right Issue, Bonus Issue, Private Placement, Buyback, etc).

Companies must choose a SEBI-approved Registrar and Share Transfer Agent with direct/online access to depositories in order to issue securities or shares in dematerialized form. The RTA oversees user transactions with the depositories and serves as a direct point of contact between the security issuer and the depositories.

The government has compelled the appointment of an RTA for every corporation through the most recent modifications to the aforementioned legislation. The business has to dematerialize its securities and select a registrar and share transfer agent. To prevent non-compliance, it has become a required procedure for unlisted public companies.

Wednesday, 15 February 2023

A Simple Process for Dematerializing Shares Using the RTA

 The procedure of conversion of physical share certificates in the electronic or dematerialized form is said to be dematerialization so as to handle them in a precise way. The method of Dematerialization could indeed get compared to transferring your money to a bank account rendering a person to maintain the proper records of his/her financial transactions.

Physical share certificates of shareholders can get substituted from Electronic book entries in the case of the dematerialization of shares, in which debit entries indicate the selling of shares while shares purchase would be shown as the credit entries. 

With the service of a Demat Account handled by a Depository, the shares or debt investment made through the investors could be kept in the electronic or dematerialized form. 

From depository participants (DP) and registrar and share transfer agents like SAG RTA, CAMS, etc the depositories can ask for assistance so as to hold the dematerialized shares of investors. Through  NSDL and CDSL depository in India, SAG RTA beneath the Registrar & Transfer Agent Services furnished the facility of the dematerialization.


Upon the urge of the investors, the depository would be an entity that handles all the securities of the investor in electronic form. Central Depository Services Ltd, and National Securities Depository Limited would be the two depositories in India. 

From the depository participants (DPs) the depositories can ask for help so as to function as the intermediary between the issuer company and the actual DP. Through providing the interference between the depository and the investor the DPs help the investors to buy the shares of the companies. DPs support in handling the Demat accounts of the investors precisely.

For the current procedure, a registrar and share transfer agent support the depository participants (DPs) in the security (e.g. bonds, shares, debentures, etc.) dematerialization procedure.

Read Also:- Demat Account – What it is And How To Open A Demat Account Online

To Finish the process of dematerializing the shares of the companies they are needed to take assistance from the registrar and share transfer agents, for example, SAG RTA. the share dematerialization facility for companies and shareholders would be provided by the SAG RTA. 

A Process For Dematerializing Company Shares

  • A company is obligated to make the modification in its articles of association if they want to become a share issuer or provide the facility related to Demat. 
  • In a general meeting, the company's owner must pass a separate resolution. This will enable the company to issue the shares to the investors in the dematerialized or electronic form.
  • Registration with both the Central depositories that is the National Securities Depository Limited (NSDL) and Central Securities Depository Limited (CDSL) should be completed if the private companies from India desire to apply for the dematerialization of the shares. To get registration the private firms must meet the requirements of both depositories. 
  • A company will receive International Securities Identification Number (ISIN) for each of its shares If they fulfill the terms and conditions of the Depository. 
  • “ISIN” is a unique identification 12-digit alphanumeric number that is linked with all types of securities, i.e., security, shares, Debentures, Bonds, etc. as well as it is offered via the depository to companies proceeding via the process of dematerialization.
  • The firms who want to transfer their dematerialized shares into the shareholder’s  Demat account are needed with the Demat connectivity from the depositories like CDSL and NSDL. A tripartite agreement between the company, the depositories, and the transfer agent is mandatory to take on the Demat connectivity.
  • In the identical procedure, SAG RTA which is a Registrar and Transfer Agent provides the services related to the company/issuer agent. Services such as dematerialization, initial public offers, rematerialization, and corporate Actions would get furnished by SAG RTA including that it eases the interaction between the investors and the depository participants. 
  • The company that wants its physical shares to get Dematerialized must follow certain steps. In India for companies, the rules are being made via two national depositories like NSDL and CDSL.

How Can a Dematerialized Firm Share Be Transferred into a Demat Account?

  • With a depository participant (DP), the registered shareholder of the company is initially required to open the Demat account and take the account number. 
  • After that, a Demat Request Form (DRF) would be obligated to get filled out by the registered shareholder and submit the same including with that the dematerialization to the depository participants of the physical share certificate is needed to be filled. 
  • Registered owners must utilize a separate DRF for each ISIN. a separate Demat request would be required to be filed against both the free shares and lock-in shares if the Beneficiary Owner (BO) holds both free and lock-in shares against the identical ISIN.
  • The preciseness of the DRF furnished through the registered shareholders shall get verified subsequently through the Depository participant (DP). 
  • On the NSDL and CDSL, DP can raise the request as well as similar information could be intimated to the share issuing firms along with the Registrar and Transfer Agent.
  • The issuer/ Registrar and Transfer Agent (RTA) shall validate the genuineness of the deposited share certificates to the DP and then the request would be confirmed. 
  • DPv eradicates the submitted physical share certificates and generates a Demat Request Number (DRN), after the successful raising of the Dematerialization Request (DR). The same DR shall get sent to the depository via electronic communication in which the DRF along with the share certificate shall get sent to the issuer company/ R&T Agent
  • An equal number of securities in the Demat account of the Beneficiary owner (BO) would need to be credited by the depository that has been maintained through the NSDL or CDSL, post obtaining the confirmation.
  • In the registered shareholder's Demat account, it shall transfer an equal number of securities which has been held with the CDSL and NSDL, after the depository receives the request.
While transferring the Dematerialized shares below mentioned are the roles of the Registrar and Share Transfer Agent

In the concern of completing the transfer of dematerialized shares the Registrar & Share Transfer Agent performs a vital role since they are counted as those who ask the related firms prior to making any approval to the investor's request for the subject of transferring of shares. 

At the time of the dematerialization process for the ease of investors/shareholders and mutual fund houses, Registrar & Transfer Agent, like SAG RTA, CAMS, and Karvy indeed manage the responsibilities of the documentation. R & T Agent does all the background documentation work to support the fund houses.

Through the particular shareholder, Delivery Instruction Slip (DIS) is needed to transfer his shares into the Demat Account of the other shareholder. It is important to carefully handle the Delivery Instruction Slip (DIS) since it works as an investor checkbook.

For transferring or receiving the shares from his or her Demat Account the shareholders that trade on the traditional stock exchanges must tell their DP and R&T agent. 

Before any other buyers account for making an off-market transaction i.e the transfer of shares, the DP is to get informed by the shareholder to make the same transaction succeed and could assist the registrar and transfer agent for that. 

Via the identical process, any additional security (eg., bonds, debentures, etc) could get transferred to the buyers of other accounts through the shareholders by informing the related DP of that. The Demat account number must be cited precisely in DIS.