# Section 29 — Securities in Dematerialised Form
## A. Sec 29(1) — Public Offer Companies (Overriding Effect)
Every company:
- Making a public offer; AND
- Any other prescribed class of companies
…must issue their securities only in dematerialised form.
Compliance with the Depositories Act, 1996 (and its regulations) is mandatory.
## B. Sec 29(1A) — Prescribed Unlisted Companies (2019 Amendment)
For prescribed unlisted companies:
- Securities shall be held or transferred only in dematerialised form.
- Compliance with the Depositories Act, 1996 (and its regulations) is required.
This amendment extends demat to certain unlisted entities (e.g., unlisted public companies as per MCA rules).
## C. Sec 29(2) — Other Companies (Flexibility)
Any other companies (not covered above) may:
1. Convert existing securities into dematerialised form; or
2. Issue securities in physical form as per the Act; or
3. Issue securities in dematerialised form under the Depositories Act, 1996.
## Why Demat?
- Reduces fraud and forgery (no physical certificates).
- Faster transfer and settlement.
- Aligns with the Depositories Act framework (CDSL / NSDL).
## Memory Map
| Class of Company | Demat Status |
|---|---|
| Public offer companies | Mandatory (only demat) |
| Prescribed unlisted public companies | Mandatory (hold/transfer in demat) |
| Other companies | Optional (physical or demat both allowed) |