Sharma and Verma are the shareholders of Mukta Enterprises Ltd., an unlisted public company, holding 5000 equity shares each. Both the shareholders have their holdings in physical form. In June 2019, they decided to tran

Rule 9A of The Companies (Prospectus and Allotment of Securities) Rules, 2014 provides that (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 buy back 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 management personnel has been dematerialised 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 subscribed 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 in dematerialised form before such subscription. Accordingly, the shareholders Mr. Sharma and Mr. Verma have to get their shares dematerialised before transfer of shares. Further, sub-rule (4) and (5) of rules 9A of the Companies (Prospectus and Allotment of securities) Rules, 2014 provides that the 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 the existing security holders about such facility. shall ensure that the company makes timely payment of fees (admission as well as annual) to the depositary and registrar to an issue and share transfer agent in accordance with the agreement executed between the parties. shall ensure that the company maintains security deposit, at all times, of not less than two year fees with the depository and registrar to an issue and share transfer agent in such form as may be agreed between the parties shall ensure that the company 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 Accordingly, Mukta Enterprises Limited shall ensure the compliances of above mentioned provisions.