DIRECTORSHIP IN INDIAN COMPANIES BY ‘PERSONS RESIDENT OUTSIDE INDIA’

(i.e. Foreign Nationals/ Persons of India Origin/ Non Resident Indians)

In the recent years, the Government of India has liberalized its policies for the Foreign Investors whereby they can come to India and invest in various sectors. Presently every sector except the few like railway, defence, agriculture, real estate etc are allowed by the Government, where the Foreign Direct Investment can be made through automatic/ approval routes.

However, by making FDI, a Person Resident Outside India can only become the shareholder, but the day to days affairs of the company shall lie with the Directors only. So while making investment the investor would like to be part of the Board of Directors of the company.

Hence, the Ministry of Corporate Affairs have enacted the various provisions under the Companies Act, 2013 through which the Persons Resident Outside India can be allocated the Directorship in the Indian Companies by complying with the Companies Act, 2013 (hereinafter referred as “The Act”) read along with the Companies (Appointment and Qualifications of Directors) Rules, 2014 (hereinafter referred as “The Rules”).

A Person Resident outside India can become an executive or a non-executive/independent director of Indian companies whether private, public, listed, or unlisted.

Since, At time of incorporation of the company in India or at time of appointment as Director in India Company, every person whether he is an Indian Resident or a Person Resident Outside India, requires to have a DIN for which the applicant directors/ proposed directors are required to provide a set of documents which shall be serve as the proofs for obtaining DIN.

However the documents requirements for such Persons Resident outside India is different from the point of view of their status of Residency in India/ outside India. And here we shall be discussing the documents requirements by the Persons Resident Outside India for obtaining DIN.

For this it required to understand who can the person Resident Outside India:

• 1. Foreign Nationals: Foreign Nationals are the person who are not the citizens of India and having Nationality of Country other than India.
• 2. Person of Indian Origin/ Overseas Citizens of India: A Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka and Nepal) who at any time held an Indian passport Or who or either of their parents/ grand parents/ great grand parents was born and permanently resident in India as defined in Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries.
• 3. Non Resident Indian: Non Resident Indian measn a persons who had been in India for less than 182 days in Previous Financial Year.

Documents required for the application of DIN by Foreign National

Identity proof: Copy of Passport of the Foreign National is Mandatory as an Identity Proof. Further such Passport should be duly notarised and apostilled from the Indian embassy of the country where the Foreign National Resides.

Address Proof: Copy of the driving license, passport, or utility bills like telephone bill, electricity bill. Bank statement for the last 6 months can also be taken as proof of Address of the Foreign Applicant for obtaining of DIN. Further all these address proofs should be duly notarised and apostilled from the Indian embassy of the country where the Foreign National Resides.

Photographs: Passport size photographs of the Applicant are required.

Translation: In case the Identity and Address Proofs are in a language other than Hindi/English, the proofs are mandatorily required to be translated to English by a certified translator or a notary public, under his seal, of home country where the Foreign National resides.

Contact Details: Valid E mail Id and the active Mobile No. of the Foreign Country where the Foreign National Resides must be provided.

Declaration: A Declaration stating that the applicant is not disqualified from becoming a director has to be furnished along with the DIN.

Digital Signature: A valid Digital Signature issued by Certifying Agency is needed. Further, the above documents as mentioned for obtaining of DIN can be used for obtaining the Digital Signatures also.

Case, where the apostille of documents not required:

In case the applicant is a Foreign national, then all the above stated documents required to be apostille from the India Embassy of the Country where the Foreign National applicant resides i.e,. Indian Embassy of Home Country of the applicant. But in case, such Foreign National is vising India on a BUSINESS VISA for starting / incorporating a company, then no documents is required to be apostille and his documents can be attested by the Professionals in India i.e. CA/ CS/ CWA or from the Indian Notary and can be used for obtaining of the DIN.

Documents required for the application of DIN by a Citizen of other country who is a Person of India Origin (POI) and holding an Overseas Citizenship of India (OCI) Card

In case a person who is a person of Indian Origin but now have got the citizenship of Foreign Country and he is holding the OCI Card issued by the Government of India, intends to be director in an Indian Company or start/ incorporate a new company in India, he need to have following documents for obtaining of Director Identification Number:

• Overseas Citizenship Card of the applicant duly apostille from the Indian Embassy of the country where the applicant POI resides.
• And all other documents same as that of Foreign National duly apostille from the Indian Embassy of the country where the applicant POI resides.

Case, where the apostille of documents not required:

In case the applicant is a person of Indian Origin and is holding an OCI Card, and he is on his visit to India for any reason (i.e. not mandatory that he should be on Business Visa), then no documents is required to be apostille from the Indian Embassy of the Foreign Country where POI resides and all his documents can be attested by the any Professionals in India i.e. CA/ CS/ CWA or from the Indian Notary and can be used for obtaining of the DIN.

Documents required for the application of DIN by a Non Resident Indians

A person who had been in India for less than 182 days in Previous Financial Year is a Non Resident Indian (NRI). Such NRI may be outside India for any reason like Education, Visit, Employment etc. So, in such cases, if such NRI intends to be director in an Indian Company or start/ incorporate a new company in India, he need to have following documents for obtaining of Director Identification Number:

• Pan Card: Pan Card of the NRI shall be mandatorily required as an Identity Proof duly apostilled from the Indian Embassy of the country where the applicant NRI resides presently.
• Permanent Resident Proof: Which shall be an Indian Address Proof like Aadhaar card, Driving License, Bank Statement, or any utility Bill.
• Present Address Proof: Present Address Proof of the country where the NRI presently resides which can be Driving License, Bank Statement, or any utility Bill.
• And all other documents same as that of Foreign National duly apostille from the Indian Embassy of the country where the applicant NRI resides presently.

Case, where the apostille of documents not required:

In case the applicant is a Non Resident Indian who has been outside India for any reason for more than 182 days in the Previous Financial Years, then no documents is required to be apostille from the Indian Embassy of the Foreign Country where such NRI resides, in case such NRI is on his Indian Visit at time of incorporation of Company or at time of his appointment as Director in the Indian Company and all his documents can be attested by the any Professionals in India i.e. CA/ CS/ CWA or from the Indian Notary and can be used for obtaining of the DIN.

EXTENSION OF DUE DATE FOR HOLDING OF ANNUAL GENERAL MEETING (AGM)

By Mohit Sunny

Section 96 of the Companies Act, 2013 provides that every company other than a one person company shall in each year hold an Annual General Meeting of its shareholders and not more than fifteen months shall elapse between the date of one annual general meeting of the company and that of the next.

Provided that first annual general meeting of the Company shall be held within nine months of the closing of the financial year and subsequent annual general meetings shall be held within six months of the closing of the financial year.

However, if the companies feel that it is not possible to hold the Annual General Meeting within the due time period of 6 months from close of Financial Year, the company may apply for extension of date of AGM and the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, for a period not exceeding three months.

That means Registrar on special circumstances, may extend the time of holding of AGM by a company, which has applied for extension, upto December 31st.

REASONS FOR EXTENSION OF AGM

There may be a no. of reasons because of which it might not be possible for the companies to hold the AGM within the due period of time. Presently, Covid-19 situation is the one. In our 12 years of Practice, we have seen that the companies use to face difficulties in following circumstances also.

Some of the other reasons for extension of AGM have been provided hereunder:

• (a) Due to non-signing of financial statements due to non-availability of Auditors. Non availability may arise due to resignation, death, incapacity to sign or such other valid reason.
• (b) Non-readiness of the financial statements due to natural calamity, due to loss of financial data, absence of Directors.
• (c) Non availability of Managing Director since the financial statements must be signed by the Managing Director of the company along with any one of the director of the company.
• (d) Non-availability of directors on the valid grounds.
• (e) The sudden death of Directors and consequence of this the limit of directors goes below the minimum requirements of directors.
• (f) Confiscation of Books of accounts by Income Tax Department, Serious and Fraud Investigation Cell or any other Government officials.
• (g) Such other special reasons if such reasons are valid and justified.

PROCEDURE TO FILE APPLICATION SEEKING EXTENSION OF TIME FOR HOLDING ANNUAL GENERAL MEETING:

• 1. Chairman/ Director of the company shall call for a meeting of Board of Director for which a notice must be sent at least 7 days before holding of Meeting of Board.
• 2. To Convene a Board Meeting on the specified date.
• 3. To Pass a resolution for extension of time limit for holding annual general meeting specifying the due reason for extension of AGM.
• 4. To file an application to the Registrar of Companies in Form No – GNL1.
• 5. In GNL-1, the special reason for not to be holding of AGM along with other necessary information to be provided.
• 6. To attach the Certified true copy of the Board Resolution in E Form GNL-1.
• 7. Follow up with the office of the Registrar of Company.
• 8. The registrar shall examine the application on the specific grounds and may grant an extension, if it thinks it necessary to grant the same.
• 9. To obtain the certificate of grant of extension in holding of Annual General Meeting of the company.

APPLICATION MUST BE FILED WELL IN ADVANCE BEFORE THE DUE DATES

Company may file an application for extension of time limit for holding of Annual General Meeting. But it is to be noted that the date of filing of an application must be well in advance. And the dates depend from case to case.

PENALTY IN CASE OF DEFAULT BY THE COMPANY/ DIRECTORS

Company and every officer of the Company who is in default shall be punishable with fine which may extend to Rs. 1 Lakh and in case of continuing default with a further fine which may extend to Rs. 5000/- for every day during which such default continues.

COMPOUNDING IN CASE AGM IS NOT HELD OR HELD AFTER DUE DATE WITHOUT APPROVAL FROM ROC:

If the Annual General Meeting is not held within the due date mentioned above or held after the due date but without taking approval of ROC for an extension then the Company will have to go to RD for compounding.

CONCLUSION: EXTENSION OF DUE DATE OF AGM IN THE CURRENT FINANCIAL YEAR

Since, the MCA extended the dates for holding of AGM in the past due to the pandemic of Covid-19, many companies expect similar blanket extensions during tough operational years. However, when economic and commercial environments are operating normally, it does not seem likely that MCA will routinely issue general circulars for baseline extensions.

Even when representations are filed by various professional associations of CAs and CSs due to issues like portal overhauls or administrative pressures, the Ministry may choose to only extend specific dynamic forms filing timelines (like E-Form AOC-4 and MGT-7) rather than granting blanket AGM deadline reliefs for all corporations.

Therefore, individual companies that find themselves genuinely unable to hold their statutory meetings on time due to valid internal constraints must proactively draft and file a custom application with their respective Regional Registrar of Companies (ROC) to secure a targeted operational extension.

Requirement of CSR-1 Form by NGOs/Societies/Trust to Avail Corporate Funding

By Mohit Sunny

In this article, we shall be discussing what the CSR-1 Form is, what documents are required to be attached along with this form, and what the pre-requirements are for NGOs, Trusts, and Section 8 companies before filing Form CSR-1 with the regulatory authority.

Understanding E-Form CSR-1

Following updates introduced by the Ministry of Corporate Affairs, companies can make Corporate Social Responsibility (CSR) donations only to such entities which have filed the CSR-1 E-Form with the Central Government through the MCA21 Portal.

Alternately, we can say that only such entities—namely Registered Public Trusts, NGOs, or Section 8 companies—can avail or receive donations from corporate bodies that have registered and filed the CSR-1 Form with the Ministry. Therefore, it is mandatory for all NGOs which want to raise corporate funding to enroll with the MCA system.

Entities Entitled to File CSR-1 Form

• (a) A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, established by the company, either singly or along with any other company.
• (b) A company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government.
• (c) Any entity established under an Act of Parliament or a State legislature.
• (d) A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar charitable activities.

Hence, any entity which has been established for the purpose of serving society (generally known as a Charitable Society or Non-Government Organisation), or any company incorporated under Section 8 of the Companies Act specifically for CSR or charitable purposes, is entitled to file the CSR-1 Form and obtain donations from CSR-compliant corporations.

Mandatory Pre-Requirements and Norms

The aforementioned entities must strictly comply with specific administrative norms before applying for the CSR-1 Form. In case the entities have not completed any of these baseline milestones, they shall not be eligible to apply. The key requirements are:

• The entities must be Registered Entities under the Society Registration Act, Trust Act, Companies Act, or any relevant State or Central Legislature framework.
• The entities must have successfully applied for and obtained a registration certificate under Section 12A of the Income Tax Act.
• The entities must have successfully applied for and obtained a certification registration under Section 80G of the Income Tax Act.
• Please note that generally, the 80G Certificate is fully validated where the societies maintain a clear track record of at least 3 years and have regular income tax return filings supported by audited balance sheets. Therefore, a 3-year operational history is highly essential before executing the CSR-1 registration process.

Documents Required for Filing of CSR-1 Form

The following documents are required to be compiled for a successful submission of Form CSR-1:

• 1. PAN Card Copy: A clear copy of the PAN Card of the NGO, Trust, or Section 8 company, duly stamped and signed by the President or Director of the entity.
• 2. Valid Contact Credentials: A valid Email ID and Mobile Number of the authorized representative. The representative will receive a real-time One-Time Password (OTP) on these channels to complete verification. The final registration certificate is also issued and delivered directly to the registered email address.
• 3. Management Details: Complete details of all Directors, Board of Trustees, Chairman, CEO, Secretary, or Authorized Representatives of the entity.
• 4. Registration Certificate: A copy of the formal Registration Certificate of the Trust, Society, NGO, or Section 8 Company, duly stamped and signed by the President or Director.
• 5. Section 12A Proof: A copy of the formal Certificate issued under Section 12A of the Income Tax Act, duly stamped and signed by the management head.
• 6. Section 80G Proof: A copy of the formal Certificate issued under Section 80G of the Income Tax Act, completed with professional stamps and authorized signatures.
• 7. Board Resolution: A copy of the formal resolution passed by the management board, explicitly authorizing the President, Director, or specific member to execute and apply for the CSR-1 registration.
• 8. Digital Signatures: A valid Digital Signature Certificate (DSC) of the person authorized by the Trust, Society, or Company to digitally sign and authenticate the E-Form CSR-1.

LEI: Legal Entity Identifier Code and its Necessities

By Mohit Sunny

Legal entity identifier (LEI) code is a unique identification code which is being issued to the entities which trade in financial markets. These Financial Markets may be stocks, bonds, futures, forex, etc. The transactions or the deals conducted in the markets by one entity will have connected to another entity by an LEI code.

LEI codes are generally used for regulators to oversee financial markets. LEI help to connect the financial markets, companies and the regulators altogether seamlessly.

WHY LEI CODE IS REQUIRED

The main reason behind the Global Legal Entity Identifier is to simplify, standardize and provide the ease of identification of any legal entity worldwide. There may be any number of methods to identify the entities which vary from market to market and country to country, but the Global LEI System ensures to have just one standard system when it becomes fully operational worldwide.

If we look from the viewpoint of the Reserve Bank of India, the LEI system helps to improve the transparency in financial data systems and ensure a significant reduction in financial crises in the country.

Moreover, it helps banks and credit providers in monitoring the exposure of corporate borrowers. It will prevent banks from issuing multiple loans against the same collateral asset records.

WHO REQUIRES TO OBTAIN THE LEI

The Legal Entity Identifier (LEI) is a global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction.

It is mandatory to acquire an LEI for every entity including all intermediary institutions, banks, mutual funds, partnership companies, trusts, holdings, special purpose vehicles, asset management companies and all other institutions being parties to financial transactions.

ENTITIES REQUIRED TO HAVE LEI REGISTRATION

An entity registered in India needs to apply for an LEI code from time to time. The list of entities eligible to apply for LEI codes are but not limited to:

• Sole Proprietorships, Limited Liability Partnerships (LLPs), and Partnership Firms.
• Private Limited Companies, Public Limited Companies, One Person Companies (OPC), and Government Companies.
• Trusts, Cooperative Societies, Multistate Cooperative Societies, and Non-Profit Organizations.
• Insurance Companies, Housing Finance Companies, and Non-Banking Financial Companies (NBFCs).
• Special Purpose Vehicles (SPV) formed under Trusts, Companies, or Partnership structures.
• Mutual Funds, Mutual Funds-Sub Schemes, Pension Funds, and Pension Fund Sub-Schemes.
• Alternative Investment Funds (AIF) and AIF-Sub Schemes.
• Nationalised Banks, Scheduled Urban Cooperative Banks, Regional Rural Banks (RRBs), and Payment Banks.
• Stand Alone Primary Dealers, Public Financial Institutions, and Unlimited Companies.
• Provident, Superannuation, Gratuity, or Insurance Funds, and Hindu Undivided Families (HUF).

The Reserve Bank of India has mandated the implementation of the LEI system for all participants in the Over-the-Counter (OTC) markets for Rupee Interest Rate derivatives, foreign currency derivatives and credit derivatives in India, in a phased manner.

Entities without an LEI code would not be eligible to participate in the OTC derivative markets. However, individuals acting in a natural capacity are currently out of scope to apply for an LEI.

WHO CAN ISSUE THE LEIs

The Global Legal Entity Identifier Foundation (GLEIF) has introduced the concept of the ‘Registration Agent’. A Registration Agent helps legal entities to access the network of LEI issuing organizations responsible for performing LEI issuance and related services. LEI issuers are also referenced as Local Operating Units or LOUs.

BENEFICIAL FOR BANKS

Banks are one clear example of companies who use different identifiers internally to identify the same customer profile. Vendors associated with the bank may also use different cross-checking identifiers. LEI can effectively consolidate some of these data management issues.

The bank of the future will use LEIs and organization identity to save time onboarding, make processes more efficient and have a greater understanding of the transactions they are being asked to make, thereby providing a better safety net for the bank and for the clients they work with.

CONCLUSION

From the above, we can conclude that to ensure total transparency in the Financial Market, the RBI may bring more and more entities into the ambit of LEI. This framework will help the banks to thoroughly review the transaction history and patterns of customers to systematically avoid any risk of Non-Performing Assets (NPAs) in the future.

Small Companies Under Companies Act 2013: Its Benefits & Privileges

By Mohit Sunny

The Ministry of Corporate Affairs (MCA) has introduced major structural changes to the definition of a "Small Company" under the Companies Act, 2013. By revising the monetary parameters of paid-up share capital and turnover, the Central Government has successfully brought thousands of private limited entities under a relaxed compliance umbrella, significantly boosting the ease of doing business across the country.

Pursuant to Section 2(85) of the Companies Act, 2013, a Small Company is defined as a company—other than a public company—that concurrently satisfies the following statutory thresholds:

• Paid-up Share Capital: Must not exceed ₹10 Crore (or such higher prescribed amount which shall not be more than ten crore rupees).
• Annual Turnover: Must not exceed ₹100 Crore as per its profit and loss account for the immediately preceding financial year (or such higher prescribed amount which shall not be more than one hundred crore rupees).

Important Statutory Exclusions

It is critical to note that even if an entity falls well within the prescribed capital and turnover limits, the status and benefits of a Small Company shall explicitly not apply to the following classes of corporate bodies:

• A formal Holding Company or a Subsidiary Company.
• A non-profit charitable enterprise registered under Section 8 of the Companies Act, 2013.
• Any specialized company or corporate body governed entirely by a dedicated Special Act (such as banking or insurance corporations).

Key Benefits and Compliance Privileges for Small Companies

Qualifying under this framework allows business promoters and corporate administrators to enjoy substantial procedural reliefs, reducing overall legal expenditure and operational overheads:

1. Relaxed Board Meetings Frequency: While standard private companies must mandatorily conduct at least 4 Board Meetings in a calendar year, a Small Company is permitted to hold just 2 Board Meetings. The rule requires one meeting in each half of a calendar year, provided the intervening gap between the two consecutive meetings is not less than 90 days.

2. Simplified Annual Return Signing: The formal Annual Return of a Small Company can be legally authenticated and signed by a practicing Company Secretary (CS) alone. In circumstances where the entity does not employ a dedicated CS, a single Director has the full authority to sign the return independently.

3. Exemption from Cash Flow Statements: Small companies are explicitly exempted from maintaining or filing a Cash Flow Statement as part of their year-end financial statements. This eliminates time-consuming accounting processes when uploading annual filings with the Registrar of Companies (ROC).

4. Abridged Directors' Report: The Ministry allows small companies to draft a highly condensed, abridged version of the Board's Report. Furthermore, the extensive reporting requirements regarding corporate policies, targets, and internal frameworks mandated under Rule 8 of the Companies (Accounts) Rules, 2014 do not apply.

5. Fast-Track Merger Framework: The legal process of structural restructuring or executing a merger between two or more small companies (or between a start-up and a small company) is significantly faster, less litigious, and far less expensive under Section 233 of the Act.

6. Exemption from Mandatory Auditor Rotation: Under Section 139(2), standard companies must rotate individual auditors after 5 years and audit firms after 10 years. Small companies are completely exempt from this restriction, providing valuable accounting continuity and lowering professional onboarding fees.

7. No Reporting on Internal Financial Controls: Statutory auditors are not required to include an extensive assessment of the adequacy and operating effectiveness of the entity's Internal Financial Controls (IFC) within the Independent Audit Report.

8. Reduced ROC Filing Fees: The Ministry prescribes scaled-down, lower base fees for statutory filings and form submissions executed by certified small companies under Section 403 of the Act.

9. Proportionate and Lesser Penalties: Under Section 446B, if a small company or its officer-in-default fails to comply with critical annual provisions (such as Section 92, 117, or 137), the maximum financial liability is capped at exactly one-half (50%) of the standard penalty specified in the respective sections.

10. E-Form Certification Relaxations: Small companies are not structurally forced to get their regular annual corporate E-Forms certified by practicing external professionals. However, because regulatory criteria, guidelines, and compliance forms shift dynamically year after year, obtaining professional validation prior to submission is always highly recommended to avoid inadvertent data errors and sudden additional fees.

Conclusion

Operating as a Small Company allows growing businesses to utilize precious management hours to scale commercial operations rather than dealing with massive regulatory workflows. However, corporate owners must remember that Small Company status is temporary and must be evaluated fresh every single financial year based on the previous year's audited books. The moment a business scales past either the capital or turnover benchmark, these regulatory privileges are automatically withdrawn for the subsequent filing cycle.

PAS-6 Mandating Conversion of Shares from Physical to DEMAT

By Mohit Sunny

The Ministry of Corporate Affairs (MCA) amended the Companies (Prospectus and Allotment of Securities) Rules, 2014 by inserting Section 9A. This statutory insertion mandates the conversion of physical share certificates into dematerialized (electronic) form for specific classes of unlisted entities, standardizing corporate governance data systems across the financial market.

Applicability of Rule 9A (Public Unlisted Entities)

The core compliance guidelines laid down under Rule 9A strictly apply to the following types of corporate setups:

• Unlisted Public Limited Companies.
• Deemed Public Limited Companies (i.e., a private company that operates as a subsidiary of a public company).

However, the provisions under Rule 9A explicitly exempt an unlisted public company which operates as a certified Nidhi Company, a Wholly Owned Subsidiary (WOS), or a Government Company.

Critical Structural Directives of Rule 9A

The framework establishes three key operational mandates that affected companies and security holders must meticulously follow:

• Issue and Demat of Securities: Entities falling under the ambit of this rule must issue new corporate securities solely in dematerialized form. Furthermore, they are required to proactively facilitate the electronic conversion of all existing physical share certificates in accordance with the Depositories Act, 1996.
• Mandatory Management Dematerialization: Before making any formal offer for the issuance of fresh securities, executing share buybacks, declaring bonus shares, or issuing rights shares, the company must ensure that the entire existing shareholding held by its Promoters, Directors, and Key Managerial Personnel (KMP) has been completely dematerialized.
• Investor Compliance Actions: Every security holder inside these covered companies must ensure that any intended transfer of shares is executed purely in electronic form. Similarly, if an investor intends to subscribe to new shares, all their existing holdings in that company must be dematerialized first.

Important Statutory Update: Mandatory Demat for Private Companies (Rule 9B)

While the original regulations focused primarily on public unlisted structures, the MCA introduced **Rule 9B**, which completely expands mandatory share dematerialization to Private Limited Companies as well. Under these updated guidelines, all private companies—excluding those classified as Small Companies or Government Companies—were mandated to secure depository connectivity, obtain an ISIN, and convert physical certificates to electronic form.

Filing Form PAS-6: Purpose and Statutory Timelines

To enforce and monitor this digital migration, every covered unlisted public company (and non-small private company mutatis mutandis) must submit **Form PAS-6** to the Registrar of Companies (ROC).

• Purpose of the Form: Form PAS-6 serves as the official *Reconciliation of Share Capital Audit Report*. It is used on a half-yearly basis to cross-verify and reconcile the total issued share capital of the company against the electronic data held across national depositories (NSDL and CDSL).
• Due Date for Submission: Form PAS-6 must be submitted to the Registrar within exactly 60 days from the conclusion of each half-year (i.e., by November 30th for the half-year ending September 30th, and by May 30th for the half-year ending March 31st). It must be formally certified by a practicing Company Secretary (CS) or a practicing Chartered Accountant (CA).

Key Operational Considerations

Corporate administrators must keep the following procedural points in mind during compliance filing cycles:

1. ISIN is Mandatory: Form PAS-6 cannot be validated or successfully submitted on the MCA portal without providing a registered International Securities Identification Number (ISIN) for each class of security. Therefore, companies must proactively coordinate with a SEBI-registered Registrar and Share Transfer Agent (RTA) to obtain their unique ISIN codes.

2. Deemed Public Traps: If a private limited company functions as a subsidiary to a public enterprise, it is legally categorized as a "deemed public company." Such organizations do not get the benefit of private exemptions and must follow the public unlisted demat compliance pipeline immediately.

Penal Provisions for Non-Compliance

Because specific penalty metrics are not explicitly written directly inside the wording of Rule 9A or 9B, any failure to obtain an ISIN, convert physical shares, or file Form PAS-6 triggers the umbrella penal provisions of **Section 450** of the Companies Act, 2013.

Under Section 450, the defaulting company and every officer-in-default are liable to an initial fixed penalty of ₹10,000. In scenarios where the compliance breach continues unchecked, a further daily penalty of ₹1,000 is levied for every day the default persists after the first, subject to maximum statutory caps defined by corporate laws.

Conclusion

Filing Form PAS-6 makes it completely impossible for unlisted public concerns and mid-to-large private limited companies to maintain opaque, paper-based share registries. It is the absolute responsibility of corporate boards to promptly secure their respective ISIN codes, guide their shareholders through depository account operations, and ensure that periodic reconciliation audit forms are submitted on time to prevent severe systemic fines.