WHETHER PRIVATE LIMITED COMPANIES NEED TO CONVERT THEIR SHARES INTO DEMAT? - Series 498
WHETHER PRIVATE LIMITED COMPANIES NEED TO CONVERT THEIR SHARES INTO DEMAT?
Amendment Act, 2019 created confusion by ‘removing word PUBLIC from section 29(1)(b). Confusion is that after removal of word Public whether provision of section 29 applicable on private limited company also.
Further according the provisions of Section 2(68) of the Act read with the Articles of Association of such private companies, there is a restriction on transfer of shares and shares of private company are not freely transferable. This is feature of Private Limited Company. Therefore, it is not that easy for CG also to make provision of Dematerialization of securities mandatory on Private Limited Companies.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at firstname.lastname@example.org)
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