An RTA like Nextgen acts as the official record-keeper for a company's shareholders. We manage all investor servicing operations, including share transfers, dematerialization, dividend payments, and maintaining the register of members to ensure accuracy and compliance.
Yes, absolutely. Shareholders holding physical securities can update these details by submitting the prescribed Form ISR-1 along with self-attested copies of their PAN and Aadhaar. For demat holdings, this update must be done directly with your Depository Participant (DP).
An RTA assists Section 8 companies by professionally managing their register of members, just as we would for any other company. We handle the issuance of memberships, process transfers, ensure compliance with MCA regulations, and provide a formal structure for their record-keeping.
Yes, as per MCA's Rule 9B, it is mandatory for certain classes of private companies (excluding small companies) to dematerialize their entire holding of securities. They are also required to facilitate the dematerialization of all existing securities held by their members.
These are MCA rules mandating dematerialization. Rule 9A applies to unlisted public companies, requiring them to issue and transfer securities only in demat form. Rule 9B extends a similar dematerialization requirement to specified classes of private companies.
Form PAS-6, the 'Reconciliation of Share Capital Audit Report', is a mandatory half-yearly filing required for all unlisted public companies. This form ensures their total issued capital perfectly matches the shares held in demat and physical forms.
A private company can obtain an ISIN by first appointing a SEBI-registered RTA like Nextgen. We prepare and submit the necessary application and corporate documents to one of the depositories (NSDL or CDSL), which then generates and allots the unique ISIN for the company's securities.
Yes, a company can change its RTA at any time. The process involves the company's board passing a resolution to appoint a new RTA, followed by a secure and structured transfer of all shareholder data from the old RTA to the new one.
Section 2(8) of the Companies Act, 2013, defines Nominal Capital as the amount of capital that the Memorandum of the company authorizes as the share capital of the company. Hence, it is the registered amount authorized that can be raised by issuing shares.
Nominal Capital is also known as Authorized Capital, and should not be confused with Paid up Capital
If your paid-up capital exceeds INR 4 crores and your annual turnover is over INR 40 crores, the Ministry of Corporate
Affairs mandates you to dematerialise by September 30th, 2024.
However, even if you don't fall into this range right now, it is advisable to proactively dematerialise your physical shares
as the mandate will apply to you, as your business grows
The timeline depends on the number of shareholders, cap table complexity and the availability of all the necessary
documents. However, on an average, it could take anywhere between 2-5 weeks.
The Indian government made it mandatory for private limited companies to dematerialise their shares in October 2023
with the aim to improve transparency, efficiency, and investor protection in the corporate sector. This move is expected
to create a more streamlined and secure business environment for both private companies and investors in India.
Registrar and Transfer Agents (RTAs), like NextGen Share Registry manage investor records.
- Depository Participants (DPs), like MLB Capital assist investors with demat account opening and securities
transactions.
- Depositories (NSDL or CDSL) are institutions that hold securities electronically.
An ISIN, or International Securities Identification Number, is a globally recognized code used to uniquely identify
securities such as stocks, bonds, and other financial instruments. It serves as a standardized identifier assigned to
each security, facilitating efficient trading, settlement, and regulatory compliance
While there are no specific penalties for non-compliance with Section 29 of the Companies Act, which addresses the
dematerialisation mandate along with Rule 9B of the PAS Rules, it's important to note that the general penalties
outlined in Section 450 of the Companies Act could potentially be applicable in this scenario:
The company can't issue or allot any securities including bonus shares in any form and buyback of shares/securities.
Any shareholder who has not dematerialised their holdings will be unable to sell their shares or subscribe to additional
shares.
The company faces monetary penalties of INR 10,000 plus INR 1,000 for each day the violation continues,…
Form PAS-6 is introduced by the MCA for unlisted public companies to submit the Reconciliation of Share Capital Audit
Report provided under sub-rule (8) and (8A) of rule 9A Companies (Prospectus and Allotment of Securities) Rules,
2014.
It shall be submitted by the unlisted public company on a half-yearly basis to the Registrar under whose jurisdiction the
registered office of the company is situated within sixty days from the conclusion of each half-year duly certified by a
company secretary in practice or chartered accountant in practice.
The company shall also immediately bring to the notice of the depositories any difference observed in its issued capital
and the capital held in dematerialised form.
Physical shares are tangible paper certificates that represent ownership and are prone to loss or damage. Demat shares are the electronic equivalent, held securely in a demat account with a depository, which allows for secure, instant, and seamless online transfers.
A record date is a cut-off date set by a company's board to determine which shareholders are eligible to receive the benefits of a corporate action, such as a dividend or bonus shares. If you are a registered shareholder on this date, you are entitled to the benefit.
A transfer of shares is a voluntary act of giving shares by one living person to another, like a sale. Transmission is the process of registering shares in the name of a legal heir or successor by operation of law, which typically occurs upon the death of the original shareholder.
The ISR (Investor Service Request) forms are SEBI-mandated forms for shareholders holding physical securities. ISR-1 is used to update PAN, KYC, and contact details. ISR-2 is used to provide a bank mandate for dividend payments. ISR-3 is for opting out of nomination.
A shareholder can register a nominee by filling out and submitting Form SH-13 to the RTA. Registering a nomination is highly recommended as it greatly simplifies the process of transmitting shares to a legal heir in the future.
Shareholders should always keep their contact and bank details updated with the RTA or their DP. They should also register for email delivery of statements, never share passwords or OTPs, and be cautious of unsolicited offers to buy their shares.
To process a dividend, a company must provide us with the certified Board Resolution declaring the dividend, the specified record date, and access to the company's designated bank account for payment. We then use the verified shareholder register to ensure payments are distributed accurately.
No, GST registration is not compulsory for applying for an ISIN. The mandatory requirements for ISIN allotment include incorporation documents, board resolution, and tripartite agreements with the depository and RTA. However, if a company is already registered under GST, those details may also be provided for record purposes.
