An unlisted company shall look into following additional aspects to issue and allot securities:
- Authorized Capital: Company to check that the authorized capital of the company is adequate for issue of shares.
- Share Certificate: Company to issue share certificate within two months from the date of allotment.
Introduction. Under Indian law, shares of an unlisted company could hitherto either be held in physical form (i.e., represented by letters of allotment / share certificates issued against such shares) or in dematerialised form (i.e., by opening an account with a depository participant, “Demat Account”).
Yes. Just like with domestic investors, NRIs can also purchase unlisted shares. The share purchased will be non-repatriable in nature.
We can conclude that it is completely safe to buy unlisted shares if the investor has gone through the required process of unlisted shares that require a process of due diligence. Unlisted markets are riskier, but of course, more risk leads to more rewards.
Can unlisted public company issue prospectus?
The prospectus contains detailed information on the securities. A public company can issue the prospectus to offer its shares and debentures, whereas a private company cannot issue prospectus.
How to Transfer Shares of a Private Limited Company
- Step 1: Obtain share transfer deed in the prescribed format.
- Step 2: Execute the share transfer deed duly signed by the Transferor and Transferee.
- Step 3: Stamp the share transfer deed as per the Indian Stamp Act and Stamp Duty Notification in force in the State.
As per the said new Rule 9A, every unlisted public company is required to issue its securities only in dematerialised form and take all necessary actions to facilitate dematerialisation of all its existing securities in accordance with the provisions of the Depositories Act, 1996 and regulations made thereunder.
When a company delists from a major exchange, shareholders still legally own their shares, even if they’re often considered worthless in value. Generally speaking, delisting is regarded as a precursor to the act of declaring bankruptcy. More often than not, the shares will continue to trade in one of the above markets.
Since shares of unlisted companies are not freely traded on stock exchanges, there is no fair or exact market price. Instead, a fair value of the share is arrived at by buyers and sellers. There is no formal market for unlisted equities.