# Dematerialisation of Shares for Private Companies

> Under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, every private company that is not a small company must issue securities only in dematerialised form and help its holders dematerialise existing shares. Companies that were not small companies on 31 March 2023 had to comply by 30 June 2025. Compliance means appointing a registrar and transfer agent, getting an ISIN from NSDL and CDSL, and filing PAS-6 every half-year.

Practice: Conversions, Changes & Closure — https://www.industax.com/services/business-changes/

After the deadline, a non-compliant company can't issue new shares, buy back or issue bonus or rights shares, and shareholders who haven't dematerialised can't transfer their shares or subscribe to new ones. Investors increasingly insist on this before closing a round.

The small-company limits were raised from 1 December 2025 (paid-up capital up to ₹10 crore and turnover up to ₹100 crore), so some companies have moved into the exemption. We check your status first, then handle the RTA tripartite agreement, ISIN, corporate action and holder conversion.

## Key facts

| Item | Detail |
| --- | --- |
| Rule | Rule 9B, Companies (Prospectus and Allotment of Securities) Rules 2014 |
| Applies to | Private companies other than small companies |
| Deadline for existing companies | 30 June 2025 |
| Steps | RTA, ISIN from NSDL/CDSL, corporate action |
| Ongoing | PAS-6 reconciliation every half-year |

## Who needs this

- Private companies above small-company limits
- Funded startups with investor shareholders
- Companies planning a share issue, buyback or transfer

## What's included

- Applicability check
- RTA appointment and ISIN application
- Conversion of existing physical shares
- PAS-6 filing

## Documents

- Register of members and share certificates
- Board resolution for demat
- Shareholders' demat account details

## Process

1. **Check** — Small-company status confirmed.
2. **Connect** — RTA appointed; ISIN obtained.
3. **Convert** — Shares credited to holders' demat accounts.

## FAQs

### Is demat compulsory for small private companies?

Not currently. Rule 9B exempts small companies and government companies. A company that crosses the small-company limits must comply within 18 months of the end of that financial year.

### What if a shareholder doesn't open a demat account?

Their shares stay valid, but they can't transfer them, and can't subscribe to bonus, rights or new issues until they dematerialise their existing holding.

### How long does getting an ISIN take?

Typically two to four weeks after the RTA agreement and depository applications are complete, depending on the depositories' queries.

## Official sources

- Ministry of Corporate Affairs — MCA21 portal: https://www.mca.gov.in/
- NSDL — ISIN and dematerialisation: https://nsdl.co.in/

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This is general information, not advice for your specific facts.