MCA vide circular dated 24th January, 2024 has issued the Companies (Listing of equity shares in
permissible jurisdictions) Rules, 2024.
Application and Scope:
The rules apply to unlisted public companies and listed public companies that comply with regulations set by the Securities and Exchange Board or the Authority. These companies must issue securities for listing on approved stock exchanges in permissible jurisdictions.
Listing Procedures:
Unlisted public companies, not falling under specific criteria, may issue equity shares for listing on stock exchanges in permissible jurisdictions. This includes the offer for sale of equity shares by existing shareholders. Compliance with the Scheme is mandatory, and companies intending to list on recognized stock exchanges in India must adhere to additional conditions specified by the Securities and Exchange Board of India.
Prospectus Filing:
Unlisted public companies must file a prospectus in e-Form LEAP-1 within seven days of finalization and submission in the permitted exchange. This ensures transparency and provides potential investors with comprehensive information about the company.
Financial Standards Compliance:
Post-listing, companies must adhere to Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015. This aligns with global financial reporting norms, ensuring consistency and transparency in financial statements.
Eligibility Criteria:
Certain companies are ineligible for listing under these rules, including those registered under section 8 or declared as Nidhi, companies limited by guarantee with share capital, and those with outstanding public deposits. The rules also disallow companies with negative net worth or a history of defaulting on payments to creditors. However, if a company rectifies defaults and two years pass since rectification, it becomes eligible.
