Form PAS-6: Reconciliation of Share Capital Audit Report

Form PAS-6 is a half-yearly report required from unlisted public companies, detailing changes and status of share capital. This form must be submitted to the Registrar of Companies (ROC) and needs to be certified by a practicing Company Secretary (CS) or a Chartered Accountant (CA).

The Ministry of Corporate Affairs (MCA) introduced Form PAS-6 via a notification on 10th September 2018. This notification amended the Companies (Prospectus and Allotment of Securities) Rules, 2014 by inserting Rule 9A (sub-rule 8) through the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019. This rule mandates that unlisted public companies issue securities only in dematerialized form starting from 2nd October 2018.

Applicability of Form PAS-6

Form PAS-6 is applicable to all unlisted public companies that issue shares in accordance with Rule 9A of the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019. However, the following types of unlisted public companies are exempt from filing Form PAS-6:

• Nidhi companies
• Government companies
• Wholly owned subsidiaries

Issuance of Securities by Unlisted Companies

Rule 9A of the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019 outlines the requirements for issuing securities by unlisted public companies. Under these rules:

• Securities Issuance: All unlisted public companies must issue securities exclusively in dematerialized form.
• Facilitation of Dematerialisation: Companies must facilitate the dematerialization of all existing securities.
• Compliance: Securities issuance and dematerialization must comply with the Depositories Act, 1996, and its regulations.

Pre-Offer Requirements:

• Dematerialization of Key Holders: Before making any offers (such as issuing new securities, buying back securities, issuing bonus shares, or rights offers), the company must ensure that all securities held by its directors, promoters, and Key Managerial Personnel (KMP) are dematerialized.

Post-2nd October 2018 Requirements:

• Transfer of Securities: Holders intending to transfer securities must dematerialize them before the transfer.
• Subscription to New Securities: Individuals subscribing to new securities (through bonus shares, private placements, or rights offers) must ensure all their existing securities are held in dematerialized form.

Company Responsibilities:

• Application to Depositories: Companies should apply to a depository (as defined in Section 2(1)(e) of the Depositories Act, 1996) for the dematerialization of existing securities.
• ISIN: Secure an International Security Identification Number (ISIN) for each type of security.
• Inform Security Holders: Notify all existing security holders about the facility for dematerialization.

Contents of Form PAS-6

Form PAS-6 must include the following details:

• Company Details:
  • Company Incorporation Number (CIN)
  • International Security Identification Number (ISIN) for each type of security
• Capital Information:
  • Issued capital details
  • Shares held in dematerialized form with NSDL, CDSL, and in physical form
  • Explanation for any discrepancies in the capital
• Changes in Share Capital:
  • Details of any changes during the half-year, such as bonus issues, rights issues, ESOPs, private placements, conversions, amalgamations, capital reductions, buybacks, forfeitures, and other adjustments
• Holdings of Key Personnel:
  • Total shares held by directors, promoters, and Key Managerial Personnel (KMP) in both physical and dematerialized forms
• Demat Requests:
  • Number of demat requests confirmed after 21 days
  • Demat requests pending beyond 21 days with reasons for the delay
• Certifying Professionals:
  • Details of the Company Secretary (CS) of the company, if applicable Practicing CS or Chartered Accountant (CA) certifying the form

Due Dates for Filing Form PAS-6

Form PAS-6, being a half-yearly report, must be filed with the Registrar of Companies (ROC) within 60 days from the end of each half-year period. The due dates are:

Process for Filing Form PAS-6

Follow these steps to file Form PAS-6:

1. Download the Form: Obtain the e-form PAS-6 from the MCA website.
2. Complete the Form: Fill in all required details in the e-form PAS-6.
3. Attach Digital Signature:
   • Director, CEO, CFO, or Secretary: Attach the digital signature of the Director, CEO, CFO, or Company Secretary.
   • Provide Identification:
     • For a director’s digital signature, include the Director Identification Number (DIN).
     • For a CEO or CFO, provide their PAN card number.
     • For a Company Secretary, include their membership number.
4. Affix Certifying Professional’s Signature:
   • Attach the digital signature of a practicing Chartered Accountant (CA) or Company Secretary (CS).
   • Enter their membership number or Certificate of Practice (COP) number.
5. Submit the Form: Submit the e-form along with the prescribed fees.

FAQ’s

• What is the ISIN Code?

The International Securities Identification Number (ISIN) is a unique 12-digit alphanumeric code used to identify securities. It helps in standardizing the identification of securities across different markets and countries.

• Allocation: Each ISIN is assigned by a National Numbering Agency (NNA), which is a country-specific body responsible for issuing ISINs for all securities within that country.
• In India:
  • The Securities and Exchange Board of India (SEBI) has designated the National Securities Depository Limited (NSDL) to issue ISINs for various securities.
  • For government securities, the allotment of ISIN codes is regulated by the Reserve Bank of India (RBI).

• Filing Form PAS-6 Without an ISIN

No, you cannot file Form PAS-6 without an ISIN. The ISIN is a mandatory field in Form PAS-6. If the ISIN has not been obtained, the company will be unable to file the form, resulting in non-compliance with Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

• Filing Form PAS-6 for Multiple Securities

Yes, a company must file Form PAS-6 separately for each class of security. According to Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014, only one ISIN can be included per Form PAS-6. Therefore, for different types and classes of securities, separate forms are required. The company must submit Form PAS-6 for each ISIN issued to it.

• Penalty for Delayed Filing of Form PAS-6

For delays in filing Form PAS-6, the penalties are as follows:

• One-Time Penalty: A penalty of Rs. 10,000 is imposed on the company.
• Daily Penalty for Continuing Default:
  • A penalty of Rs. 1,000 per day is imposed on both the company and the officer in default.
  • This daily penalty is subject to a maximum of Rs. 2,00,000 for the company and Rs. 50,000 for each officer in default.

These penalties are in accordance with Section 450 of the Companies Act, 2013.

• Issuance of Shares in Physical Form

No, a company cannot issue shares in physical form. According to Rule 9A(1)(a) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, companies are required to issue new securities only in dematerialized (Demat) form.

Disclaimer: The materials provided herein are for informational purposes only and do not constitute legal, financial, or professional advice. Consult relevant laws and experts before acting on this information. Neither the author nor K M GATECHA & CO LLP is liable for any inaccuracies or omissions. This material is purely educational and not an advertisement or solicitation.