Dematerialisation Of Securities

On October 27, 2023, the Ministry of Corporate Affairs, notified the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023 ("Amended Prospectus Rules") to amend the Companies (Prospectus and Allotment of Securities) Rules, 2014 ("Prospectus Rules"). The provisions came into force on October 27, 2023. The Amended Prospectus Rules make the following significant changes to the extant Prospectus Rules:

1. Dematerialisation of Securities: The Amended Prospectus Rules mandate all private companies, save and except Small Companies (as defined hereinafter), to within the prescribed timeline: (i) issue securities only in a dematerialised form; and (ii) facilitate dematerialisation of all its securities. Private companies to which the Amended Prospectus Rules apply will have to comply with the provisions of this rule within 18 (eighteen months) from 31st March 2023; i.e. by and before September 30, 2024. Additionally, any company to which the Amended