The government on Tuesday mandated that issue of further shares and transfer of all shares by unlisted public companies should be only in demat form beginning October 2.
This was notified by the Ministry of Corporate Affairs. “The rules in this regard have been amended accordingly,” an official statement said. According to the government, the move would help eliminate risks associated with physical certificates such as loss, theft, mutilation and fraud.
Additionally, this would improve the corporate governance system by increasing transparency and preventing malpractices such as benami shareholding, it said.