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CS Executive · Capital Market and Securities Laws · Issue and Listing of Non-Convertible Securities

Meridian Housing Ltd is making a public offer of non-convertible debentures. Which statement about the form of these securities is correct under the Companies Act, 2013?

The company must issue the securities only in dematerialised form. Section 29(1) of the Companies Act, 2013 obliges every company making a public offer to do so under the Depositories Act, 1996. The option of physical form is for other companies, not public issuers.

  1. AIt may choose physical or demat form as it prefers
  2. BIt must issue the securities only in dematerialised formCorrect
  3. COnly the allottees above a threshold need demat form
  4. DDemat form applies only after listing is completed

Explanation

Section 29(1) requires every company making a public offer to issue securities only in dematerialised form, complying with the Depositories Act, 1996 and its regulations. The choice in section 29(2) applies only to other companies. Hence the free-choice option is wrong.

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