What corporate legal services does Corporate Legit provide?

Corporate Legit offers India Entry Services, International Taxation, Direct & Indirect Taxation, Secretarial & Corporate Legal Compliances, Foreign Direct Investment, Intellectual Property Rights, Licensing and Registration, company registration services, Merger and Amalgamation (M&A), Litigation, Virtual CFO Services, International Advisory, Audit Services, and Registration of NGOs.

What India Entry Services do you offer?

India Entry Services helps foreign companies establish operations in India. The service assists with business structuring, necessary approvals, and compliance requirements for foreign businesses seeking to enter the Indian market.

What does your Corporate Secretarial practice cover?

Our Corporate Secretarial practice handles statutory compliance requirements for companies operating in India, including corporate legal documentation, board meeting management, and regulatory filings.

What are your Corporate Restructuring services?

Corporate Legit’s restructuring services include mergers and acquisitions, demergers, and corporate restructuring activities in accordance with regulatory requirements.

What Intellectual Property services do you provide?

We provide trademark search and registration services in IP databases, along with other intellectual property protection services, to safeguard clients’ IP rights in India.

How does Corporate Legit handle taxation matters?

Our taxation practice provides advice under Direct & Indirect Taxation, including income tax planning, GST compliance, double taxation avoidance advisory, and international taxation matters, to ensure clients remain compliant with Indian tax laws

What Registration & Licensing Services do you offer?

Corporate Legit provides registration and licensing services to help businesses obtain the necessary operational permits and registrations to conduct business legally in India.

What are your Regulatory Compliance & Audit Services?

We provide Corporate Compliance services to help businesses meet their statutory obligations and remain compliant with Indian regulatory requirements, along with supporting them through audit services in India whenever needed.

Do you provide Virtual CFO Services?

Yes, Corporate Legit offers Virtual CFO services for businesses requiring financial management expertise without a full-time Chief Financial Officer.

What makes Corporate Legit’s team qualified?

The senior members of the Firm possess professional qualifications in law, accountancy, company secretarial practices and management with international class experience from working with world-class advisory firms, including Big-4 accounting firms and international law firms.

Do you assist with NGO registration?

Yes, Corporate Legit provides Registration of NGOs (Non-Government Organisation) services to help establish non-profit entities in India.

How can businesses contact Corporate Legit?

Businesses can contact Corporate Legit at +91 9990607535, email at office@thecorporatelegit.com, or visit the office at A-77, Second Floor, Sector-4, Noida 201301, New Delhi NCR, India.

April 8, 2026
Sachin Aggrawal
Uncategorized
0

Mandatory Dematerialisation of Shares in India: Compliance, Process & Requirements

The Government of India (Ministry of Corporate Affairs) has mandated compulsory dematerialization of shares for certain private companies, introducing mandatory dematerialisation of shares in India for certain companies. As per this requirement, all private companies (other than small companies), including Wholly Owned Subsidiaries (WOS), are required to convert their issued physical share certificates into dematerialized form. The compliance deadline for this requirement, initially set as 30th September 2024, has been further extended to 30th June 2025.

In simple words, Dematerialisation of shares means shares are in electronic mode, not in physical custody like share certificates, etc. As per rules, except for small companies, all other companies are required to issue and keep all shares and securities in Demat mode only. These rules relating to mandatory dematerialisation of shares also apply to subsidiaries and wholly owned subsidiary companies operating in India.

Quick facts relating to the Dematerialisation of shares in India

Applicability for Types of Companies	Listed CompaniesPublic Limited CompaniesNon-Small Private Limited CompaniesCompanies Holding or Subsidiaries of any Body Corporate
Not applicable for Small Companies	Small Companies means having Paid Up Capital upto INR 10,00,0000(Ten Crore) and Turn over upto INR INR 100,00,0000(One Hundred Crore)
Subsidiary of foreign companies required the Dematerialisation of shares	Yes, under the dematerialisation of shares in India.
Time frame for the Dematerialisation	6-8 weeks
Authorities for Dematerialisation	NSDL( National Securities Depository Limited)CDSL(Central Depository Securities Limited)Both are under SEBI(Securities Exchange Board of India)
Process of Dematerialisation of shares in India	1. Appointment of RTA(Registrar of Transfer Agent) 2. Obtaining International Securities Identification Number (ISIN) of the Issuer CompanyOpening 3. Demat Accounts of Shareholders
Foreign Body Corporate Shareholder Required Demat in India	Yes
A foreign citizen requires a Demat in India	Yes
Annual Fee to be Paid to	RTA for ISIN number maintenanceDP (Depository Participant) for Demat Account maintenance
Every Foreign Company and Foreign Individual Require Demat account in India	Not all, only those who are shareholders in Non Small Companies, including subsidiaries and wholly owned subsidiaries of Foreign Companies in India
Consequences of Non-Compliance	1)Restriction on the issue of fresh capital 2) transfer of shares after 30^th June 2025.
Half-yearly Compliance	Reconciliation of share capital statement by filling PAS-6 file with Registrar of Companies with ISIN and Demat Details of all shareholders by 30^th May and 29^th November
Services we provide	Complete Guidance on Demat ApplicabilityObtaining ISINOpening of Demat of ShareholdersAnnual and Half-Yearly compliance of shares

Dematerialisation of Shares of a Private Limited Company, Including a Wholly Owned Subsidiary

Dematerialisation of shares in India refers to the process of converting physical share certificates and other investment instruments into an electronic form. These electronic securities are held and managed in a Demat account maintained with a depository participant and are regulated by recognized depositories such as NSDL or CDSL. This process eliminates the risks associated with physical certificates, such as loss, theft, damage, or forgery, and facilitates secure, transparent, and efficient transfer of ownership.

The Government of India (Ministry of Corporate Affairs) has mandated compulsory dematerialization of shares for certain private companies. As per this requirement, all private companies (other than small companies), including Wholly Owned Subsidiaries (WOS), are required to convert their issued physical share certificates into dematerialized form. The compliance deadline for this requirement, initially set as 30th September 2024, has been further extended to 30th June 2025.

A private company, including WOS, which is on the last day of a financial year, ending on or after 31st March, is not a small company as per audited financial statements for such financial year, shall, within eighteen (18) months of closure of such financial year, dematerialize its shares.

Steps involved in the Dematerialization of Shares of Private Companies, including Wholly Owned Subsidiary

Step 1: Appointment of Registrar and Transfer Agent (RTA)
Step 2: Obtaining the International Securities Identification Number (ISIN) of the Issuer Company
Step 3: Opening Demat Accounts of Shareholders.
Step 4: Dematerialization of Existing Shares
Step 5: Regular Reporting to RoC (Registrar of Companies)

The process of dematerialisation of shares in India takes place in two major parts:

Obtaining the ISIN of the Issuer Company
Opening of Demat Account for existing shareholders

Obtaining the ISIN (International Securities Identification Number) of the Issuer Company

Appointment of intermediaries like RTA (Registrar and Transfer Agent) and Depository

The first step is to appoint Registrar & Transfer Agent (RTA) and Depository (NSDL/ CDSL). The Company enters into a tripartite agreement with the RTA and the depository. The RTA acts as the nodal intermediary between the Company and the depositories and ensures compliance with procedural and documentation requirements.

Preparation of Application for ISIN

In order to enable the Companies to admit their securities into the depository system, NSDL/ CDSL has provided an online platform to complete the formalities for ISIN generation. The company is required to first register on the given portal. Upon successful registration, the Company may log in using the generated credentials and submit the online application for ISIN along with the requisite supporting documents and prescribed fees.

The application, once submitted, is scrutinized by NSDL/ CDSL and the RTA, and upon satisfactory verification, the ISIN is allotted for the relevant class of securities.

The following documents are generally required by NSDL/CDSL for allotment of ISIN

Application for admission as Issuer of Eligible Securities;
Net Worth Certificate issued by a Chartered Accountant;
Board Resolution;
List of authorised signatories along with their specimen signatures;
Memorandum of Association (MoA) and Articles of Association (AoA);
Certificate of Incorporation;
Audited annual report for the last financial year;
Undertaking from the Company as prescribed by NSDL/ CDSL;
Tripartite Agreement to be executed on non-judicial stamp paper between the Company, RTA, and NSDL/ CDSL;
Appointment letter to the RTA;
RTA Registration Form.

Fees Payable

The applicable fees shall be payable at the time of initial registration for ISIN allotment to both NSDL/ CDSL and RTA. The annual maintenance and custodian fees shall be payable every year towards maintenance of ISIN and depository connectivity to both NSDL/ CDSL and RTA.

Conclusion

Dematerialisation of shares in India has become a critical compliance requirement for private companies, particularly for subsidiaries and wholly owned subsidiaries of foreign entities. Ensuring timely conversion of physical shares into electronic form, along with proper documentation and reporting, is essential to avoid restrictions and regulatory issues. Given the procedural and compliance requirements involved, businesses can benefit from expert guidance. The team at CorporateLegit assists with end-to-end support, including ISIN generation, demat setup, and ongoing compliance under dematerialisation of shares in India.

Frequently Asked Questions

1. What is dematerialisation of shares in India?

Dematerialisation of shares in India refers to converting physical share certificates into electronic form, held in a demat account with NSDL or CDSL.

2. Is dematerialisation mandatory for private companies in India?

Yes, all private companies (except small companies) are required to comply with mandatory dematerialisation of shares in India, including wholly owned subsidiaries.

3. Are foreign shareholders required to open a demat account in India?

Yes, foreign shareholders holding shares in applicable companies must open a demat account as part of dematerialisation of shares in India compliance.

4. What is ISIN and why is it required?

ISIN (International Securities Identification Number) is a unique identifier required for securities to be held in demat form and is essential for dematerialisation of shares in India.

5. What are the consequences of non-compliance?

Non-compliance may restrict the issue or transfer of shares and lead to regulatory complications under dematerialisation of shares in India.

6. How long does the dematerialisation process take?

The process typically takes 6–8 weeks, depending on documentation, ISIN allotment, and coordination with RTA and depositories.