The Ministry of Corporate Affairs (“Ministry”) has notified the Companies (Listing of equity shares in permissible jurisdictions) Rules, 2024 (“2024 Rules”). The 2024 Rules have gained effect since 24th January, 2024.
These Rules are applicable to:
i. Unlisted public companies
ii. Listed public companies, which are in accordance with regulations framed or directions issued in this regard by the Securities and Exchange Board or the Authority, which issue their securities for the purposes of listing on permitted stock exchanges in permissible jurisdictions.
An unlisted public company (except companies are not eligible under the Rules 2024 given below) which has no partly paid-up shares, may issue equity shares for the purposes of listing on a stock exchange in a permissible jurisdiction. Issue of equity shares shall include, offer for sale of equity shares by existing shareholders of the unlisted public company for listing on a stock exchange in a permissible jurisdiction.
For the purpose of these Rules, Permissible Jurisdiction means International Financial Services Centre in India and Permitted Stock Exchange means India International Exchange and NSE International Exchange.
Key Compliance Obligations:
I. The unlisted public company or its existing shareholders must also comply with the requirements of the Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme made by the Central Government in the Ministry of Finance.
II. The unlisted public company must file the prospectus in e-Form LEAP-1 specified in the Second Schedule along with the fees within a period of seven days after the prospectus has been finalised and filed in the permitted exchange.
III. Post the listing of the equity shares of a company on any of the stock exchanges in a permissible jurisdiction, the company must comply with Indian Accounting Standards as specified in the Annexure to the Companies (Indian Accounting Standards) Rules, 2015 in preparation of their financial statements, in addition to any other accounting standard, which they may be required to comply for the preparation of the financial statements filed before the securities regulator concerned, or with the concerned stock exchange.
The following companies are not eligible under the Rules 2024:
a) Companies registered under section 8 or declared as Nidhi under section 406 of the Act;
b) Company limited by guarantee and also having share capital;
c) Company having any outstanding deposits accepted from the public as per Chapter V of the Act and rules made thereunder;
d) Company having a negative net worth;
e) Company which has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holder or any other secured creditor:
f) Company which has made any application for winding-up under the Act or for resolution or winding-up under the Insolvency and Bankruptcy Code, 2016 and in case any proceedings against the company for winding-up under the Act or for resolution or winding-up under the Insolvency and Bankruptcy Code, 2016 is pending;
g) Company has defaulted in filing of an annual return or financial statement of the Act within the specified period.
A Copy of the Notification is linked herewith for ease of reference.
Source: Ministry Of Corporate Affairs
