All about PAS-6

All about PAS-6 (Reconciliation of Share Capital Audit Report a half-yearly basis)

• Section 29 of the Companies Act, 2013
• Rule 9A(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014

(a) a Nidhi company
(b) a Government company
(c) a wholly-owned subsidiary Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014

Form PAS-6 has to be filed for each type of security, viz., equity and preference. The e-form relates only to share capital (equity and preference) and not with respect to debts (debentures, bonds etc.).

FAQ

Q 1. If a company has multiple securities, does it need to file multiple Form PAS-6?

Ans: Yes

Q 2. Whether debt listed companies need to submit Form PAS-6?

Yes

Q 3. If a company has obtained ISIN but some security holders have not converted their securities into Demat form, is it a non-compliance of Section 29 of the Companies Act, 2013 or Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and whether the same is to be qualified in Form PAS-6?

Ans: If Company has made intimation about ISIN and facility available for demat to all security holders as per Rule 9A(4) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, then Company has complied on its part. No time period is prescribed for converting existing securities into demat unless until any issue of securities or buy back of securities happens at Company level or any security holder approaches the Company for transfer of shares. However such companies have to file half yearly returns and have to mention that the securities are held by the members in physical form only

Q 4. Do we need to attach any documents/ supporting in PAS-6?

No, there is no need to attach anything in the form of PAS-6.

Q 5. What would be the penalty on late filing if ISIN generation is under process?

Ans: Penalty under section 450 of the Companies Act, 2013 will be applicable

Q 6. Whether UDIN is required to be generated for certification of Form PAS-6?

Ans: It is not mandatory

Q7. In Form PAS-6 shareholding pattern of promoters, directors, and KMP is to be mentioned. What if promoters are also directors and they hold 10,000 shares? Shall 10,000 shares in the promoters category and also 10,000 shares in the director’s category be mentioned? Will it not be miscalculation?

Ans: You can mention in any one category and attach clarification

Q 8. What is the penalty for delay in filing of Form PAS-6?

Ans: One time penalty of Rs.10,000 and for continuing default Penalty of Rs.1000 per day on company and officer in default as per section 450 of the Companies Act, 2013 will be applicable subject to maximum of Rs.2,00,000 on the Company and Rs.50,000 per officer in default.

Q 9. What is the due date for filing of PAS-6?

60 days from the date of the conclusion of each half year. i.e.

• Half year ended 31st March: 30th May; and
• Half year ended 30th September: 28th November.

Q 10. Whether promoter, director or KMP is required to dematerialize all securities held by them or class of securities, which the company intends to issue?

Before issuing any shares, all the securities whether equity shares, preference shares or debentures, held by a promoter, director or KMP is required to be dematerialized.

Q11. What is the procedure for obtaining Demat connectivity by company?

a) Hold a Board meeting to consider and approve proposal for obtaining DEMAT connectivity for securities with the depositories;

b) Appoint a Registrar and Transfer Agent (RTA);

c) After appointment of RTA, the company shall file an application along with relevant documents with the depository for obtaining DEMAT connectivity;

d) The company, depository and RTA shall enter into Tripartite agreement in respect of securities that are to be declared as eligible to be held in dematerialized form;

e) After verification of the application and other documents, the depository will provide the DEMAT connectivity to the company and allocate ISIN to the securities of the company;

f) Then, the shareholders of the company may approach the RTA for the dematerialization of their securities.

Q.12 What shall be the consequences on the company and shareholders, if they don’t convert shares into Demat?

The company cannot come up with following:

• Issue of new securities including rights issue and bonus issue; and
• Buy back of securities
• The shareholder cannot transfer their securities.

The author can also be reached at corpcompliance07@outlook.com