The Companies Act, 2013 mandates that most public and private companies issue and transfer securities only in dematerialised form, enhancing transparency. This implementation aims to minimize fraud and simplify ownership records.
New Legal Mandate for Dematerialisation of Securities
The Companies Act, 2013 and accompanying regulations now require public and private companies to issue and transfer securities exclusively in dematerialised form. This initiative intends to bolster transparency and curb fraudulent activities associated with physical certificates.
By instituting a legal framework for dematerialisation, the Act seeks to streamline ownership records, facilitating easier access to securities management for both companies and shareholders. Recent amendments reflect the government's commitment to modernising corporate governance.
Practitioners should ensure that their clients are compliant with these requirements, as failure to adhere could lead to legal repercussions. This shift towards dematerialisation is critical for future corporate operations and requires a careful review of current policies and procedures.
Citations
- N/A