INSUBCONTINENT EXCLUSIVE:
Transfer of shares has to be done only in the demat or electronic form, the government has saidNew Delhi: Unlisted public companies have to
compulsorily issue new shares in demat form beginning October 2, the government said on Tuesday.Besides, transfer of shares has to be done
only in the demat or electronic form.This step has been taken for "further enhancing transparency, investor protection and governance in the
corporate sector", the Corporate Affairs Ministry said in a release.The decision also comes at a time when the ministry is clamping down on
shell companies that are suspected of being conduits for illicit fund flows.From October 2, issue of further shares and transfer of all
shares by unlisted public companies shall be in dematerialised form only, the ministry said.Under the Companies Act, 2013, there are public
as well as private companies
Generally, those having more than 200 members are classified as public companies and they have to follow stricter corporate governance
norms.According to the ministry, elimination of risks associated with physical certificates such as loss, theft, mutilation and fraud, would
be a key benefit from the decision on having shares in demat form.Further, the move would help improve the corporate governance system by
increasing transparency and preventing mal-practices such as benami shareholding and back-dated issuance of shares, it said."Unlisted public
companies are expected to facilitate the dematerialisation of their securities in coordination with depositories and share transfer agents,"
the release said.Grievances would be handled by the Investor Education and Protection Fund (IEPF) Authority.
