The Classic Partners LLP

Dematerialisation of Shares

Complete dematerialisation support for private and unlisted public companies — ISIN creation, RTA and depository (NSDL/CDSL) coordination, shareholder demat drives, and half-yearly PAS-6 filings — fully compliant with Rule 9A and Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

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What is Dematerialisation of Shares?

Dematerialisation is the conversion of physical share certificates into electronic form, held in a demat account with a depository — NSDL or CDSL — through a depository participant. The company obtains an ISIN for each class of securities and appoints a Registrar and Transfer Agent (RTA), after which shareholders surrender their certificates and receive electronic credits.

Demat is no longer optional. Rule 9A has required unlisted public companies to issue and hold securities in demat form since 2018, and Rule 9B (notified on 27 October 2023) now extends this to every private company other than a small company. Enabling provisions may need an AOA amendment, and once demat is live, share transfers happen through depository instructions instead of physical SH-4 deeds.

Who Must Dematerialise Their Shares?

All unlisted public companies, under Rule 9A (applicable since 2 October 2018).
Every private company that is not a small company, under Rule 9B — broadly, companies with paid-up capital above ₹4 crore or turnover above ₹40 crore.
Private companies that cease to be small companies must comply within 18 months of the end of that financial year.
Any company planning a fresh issue, bonus, rights issue, or buyback — these actions are permitted only after the holdings of promoters, directors, and KMP are fully dematerialised.
Companies whose investors or lenders require demat holdings as a condition of funding.

Dematerialisation Process — Step by Step

Review and, if needed, amend the AOA to enable issue and holding of securities in demat form.
Appoint a SEBI-registered RTA and execute tripartite agreements with NSDL and/or CDSL.
Obtain the ISIN for each class of securities of the company.
Inform shareholders; they open demat accounts and submit Demat Request Forms (DRF) with their original certificates.
The RTA verifies the requests and the depository credits the shares in electronic form.
File Form PAS-6, the half-yearly reconciliation of share capital audit report, within 60 days of the end of each half year.

Our Dematerialisation Services

ISIN Creation

End-to-end ISIN activation for equity, preference shares, and debentures.

RTA & Depository Tie-Up

Selection of RTA and execution of agreements with NSDL and CDSL.

AOA Alignment

Enabling amendments to the articles for demat issue and transfers.

Shareholder Demat Drive

Coordinating demat account opening and DRF submission for all holders.

PAS-6 Filing

Half-yearly reconciliation of share capital audit reports filed on time.

Ongoing Compliance

Demat of fresh allotments, corporate actions, and reconciliation support.

Why Choose The Classic Partners

Rule 9A/9B specialists who have taken companies from physical to fully demat holdings.
Single-window coordination with the RTA, NSDL/CDSL, and your shareholders.
Never-miss PAS-6 calendar with half-yearly reminders and certified filings.
Transparent fees covering ISIN, agreements, and ongoing compliance.

Frequently Asked Questions

Is dematerialisation mandatory for private limited companies?

Yes. Under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014, every private company other than a small company must issue securities only in demat form and facilitate dematerialisation of all its existing securities. Small companies — generally those with paid-up capital up to ₹4 crore and turnover up to ₹40 crore — are exempt while they remain small.

What was the deadline for private companies to comply with Rule 9B?

Private companies that were not small companies as on 31 March 2023 had to comply within 18 months of the close of that financial year, i.e., by 30 September 2024. A company that subsequently ceases to be a small company gets 18 months from the end of that financial year.

What is Form PAS-6 and when is it filed?

PAS-6 is the half-yearly Reconciliation of Share Capital Audit Report that reconciles issued capital with shares held in demat and physical form. It must be filed within 60 days of the end of each half year and certified by a practising professional.

Can a company issue new shares or do a buyback without dematerialisation?

No. After the applicable deadline, a company covered by Rule 9A or 9B can make any offer of securities, bonus issue, rights issue, or buyback only after the entire holding of its promoters, directors, and key managerial personnel has been dematerialised.

What do shareholders need to do to demat their shares?

Each shareholder opens a demat account with a depository participant, fills in a Demat Request Form, and surrenders the original share certificates. The RTA verifies the request and the depository credits the shares electronically, usually within two to three weeks.

What is the penalty for not complying with the demat rules?

Since Rules 9A and 9B prescribe no specific penalty, the general penalty under Section 450 applies — up to ₹10,000 on the company and every officer in default, with a further ₹1,000 per day for continuing default, subject to the prescribed caps. Non-compliance also blocks fresh issues and buybacks.

Need to dematerialise your company's shares?

Get your ISIN, RTA tie-up, shareholder demat, and PAS-6 filings managed under one roof.