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Are Nidhi Companies require to file Form PAS-6 (Reconciliation of Share Capital Audit Report) ?

Updated: Sep 11, 2020

Ministry of Corporate Affairs deployed e-Form PAS-6 on portal w.e.f 15th July, 2020 and there are lot of ambiguities about its applicability on Nidhi Companies. Let’s understand about applicability provisions of PAS-6. Sub rule ‘8’ of Rule 9A, The Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with applicability and filing of PAS-6, same is stated as under:

“Every unlisted public company governed by this rule shall submit Form PAS-6 to the Registrar with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 within sixty days from the conclusion.of each half year duly certified by acompany secretary in practice or chartered accountant in practice.

Now as the rule said Every unlisted company governed by this rule shall submit Form PAS-6 means not every unlisted public company require to submit PAS-6, only unlisted public companies those are covered in Rule 9A, The Companies (Prospectus and Allotment of Securities) Rules, 2014 required to file this form.

Governing Area of Rule 9A, The Companies (Prospectus and Allotment of Securities) Rules, 2014

9A. Issue of securities in dematerialised form by unlisted public companies.-

(1) Every unlisted public company shall -

(a) Issue the securities only in dematerialised form; and

(b) Facilitate dematerialisation of all its existing securities

in accordance with provisions of the Depositories Act, 1996 and regulations made there under

(2) Every unlisted public company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer shall ensure that before making such offer, entire holding of securities of its promoters, directors, key managerial personnel has been demateriarised in accordance with provisions of the Depositories Act 1996 and regulations made there under.

(3) Every holder of securities of an unlisted public company,_

(a) who intends to transfer such securities on or after 2nd October, 2018, shall get such securities dematerialised before the transfer; or

(b) who subscribes to any securities of an unlisted public company (whether by way of private placement or bonus shares or rights offer) on or after 2nd October, 2018 shall ensure that all his existing securities are held in dematerialized form before such subscription.

(4) Every unlisted public company shall facilitate dematerialisation of all its existing securities by making necessary application to a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 and shall secure International security Identification Number (ISIN) for each type of security and shall inform all its existing security holders about such facility.

(5) Every unlisted public company shall ensure that _

(a) it makes timely payment of fees (admission as well as annual) to the depository and registrar to an issue and share transfer agent in accordance with the agreement executed between the parties;

(b) it maintains security deposit at all times, of not less than two years', fees with the depository and registrar to an issue and share transfer agent in such form as may be agreed between the parties; and

(c) it complies with the regulations or directions or guidelines or circulars, if any, issued by the securities and Exchange Board or Depository from time to time with respect to dematerialisation of shares of unlisted public companies and matters incidental or related thereto.

(6) No unlisted public company which has defaulted in sub-rule (5) shall make offer of any securities or buyback its securities or issue any bonus or right shares till the payments to depositories or registrar to an issue and share transfer agent are made.

(7) Except as provided in sub-rule (8), the provisions of the Depositories Act 1996 the securities and Exchange Board of India (Depositories and participants) 3[Regulations, 2018] and the securities and Exchange Board of India (Registrars to an Issue and share Transfer Agents) Regulations, 1993 shall apply mutatis mutandis to dematerialisation of securities of unlisted public companies.

(8) Every unlisted public company governed by this rule shall submit Form PAS-6 to the Registrar with such fee as provided in Companies (Registration Offices and Fees) Rules,2014 within sixty days from the conclusion.of each half year duly certified by acompany secretary in practice or chartered accountant in practice.

(8A) The company shall immediately bring to the notice of the depositories any difference observed in its issued capital and the capital held in dematerialised form.]

(9) The grievances, if any, of security holders of unlisted public companies under this rule shall be filed before the Investor Education and protection Fund Authority.

(10) The Investor Education and protection Fund Authority shall initiate any action against a depository or participant or registrar to an issue and share transfer agent after prior consultation with the securities and Exchange Board of India]

(11) This rule shall not apply to an unlisted public company which is:-

(a) a Nidhi;

(b) a Government company or

(c) a wholly owned subsidiary.

As sub rule 11 clearly states that Rule 9A isn’t applicable on a Nidhi, a Government Company and Wholly Owned Subsidiary means these companies are not governed by Rule 9A, hence Nidhi Companies are not require to file PAS 6 with ROC.


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