{"id":2762,"date":"2016-10-13T15:07:24","date_gmt":"2016-10-13T09:37:24","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=2762"},"modified":"2023-12-24T23:54:08","modified_gmt":"2023-12-24T18:24:08","slug":"corporate-and-professional-update-oct-13-2016","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/","title":{"rendered":"Overview on Dematerialization of Physical Share Certificates"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d0a368e2edb\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d0a368e2edb\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#Overview_on_Dematerialization_of_Physical_Share_Certificates\" title=\"Overview on Dematerialization of Physical Share Certificates\">Overview on Dematerialization of Physical Share Certificates<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#BRIEF_INTRODUCTION\" title=\"BRIEF INTRODUCTION\">BRIEF INTRODUCTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#DEMAT_SHARES_OF_COMPANY\" title=\"DEMAT SHARES OF COMPANY\">DEMAT SHARES OF COMPANY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#BENEFITS_OF_DEMATERIALISATION_OF_SHARES\" title=\"BENEFITS OF DEMATERIALISATION OF SHARES\">BENEFITS OF DEMATERIALISATION OF SHARES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#OPERATION_IN_DEPOSITORY_SYSTEM\" title=\"OPERATION IN DEPOSITORY SYSTEM\">OPERATION IN DEPOSITORY SYSTEM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#PROCESS_OF_DEMATERILISATION_OF_SHARES\" title=\"PROCESS OF DEMATERILISATION OF SHARES\">PROCESS OF DEMATERILISATION OF SHARES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#DOCUMENTS_REQUIRED_DEMATERIALIZATION_OF_PHYSICAL_SHARES\" title=\"DOCUMENTS REQUIRED DEMATERIALIZATION OF PHYSICAL SHARES\">DOCUMENTS REQUIRED DEMATERIALIZATION OF PHYSICAL SHARES<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#It_is_to_be_noted_that_it_generally_takes_around_15_%E2%80%93_30_days_for_opening_a_demat_account\" title=\"It is to be noted that it generally takes around 15 \u2013 30 days for opening a demat account.\">It is to be noted that it generally takes around 15 \u2013 30 days for opening a demat account.<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#REMATERIALIZATION\" title=\"REMATERIALIZATION\">REMATERIALIZATION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#COMPULSORY_TRADING_IN_DEMAT_FORM\" title=\"COMPULSORY TRADING IN DEMAT FORM\">COMPULSORY TRADING IN DEMAT FORM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#CHANCES_OF_FRAUDDISPUTES_IN_EMPLOYING_A_DEMAT_ACCOUNT\" title=\"CHANCES OF FRAUD\/DISPUTES IN\u00a0EMPLOYING A\u00a0DEMAT ACCOUNT\">CHANCES OF FRAUD\/DISPUTES IN\u00a0EMPLOYING A\u00a0DEMAT ACCOUNT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#FEE_FOR_BECOMING_A_MEMBER\" title=\"FEE FOR BECOMING\u00a0A MEMBER\">FEE FOR BECOMING\u00a0A MEMBER<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#INVESTOR_ACCOUNT_FOR_SHAREHOLDERS\" title=\"INVESTOR ACCOUNT FOR SHAREHOLDERS\">INVESTOR ACCOUNT FOR SHAREHOLDERS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-oct-13-2016\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/dematerialization-of-physical-shares.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-13234\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/dematerialization-of-physical-shares.jpg\" alt=\"dematerialization of physical shares\" width=\"950\" height=\"570\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Overview_on_Dematerialization_of_Physical_Share_Certificates\"><\/span><span style=\"color: #ff0000;\">Overview on Dematerialization of Physical Share Certificates<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"BRIEF_INTRODUCTION\"><\/span><span style=\"color: #000080;\"><strong>BRIEF INTRODUCTION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Dematerialization (Commonly\u00a0called\u00a0\u2018Demat\u2019) signifies<a href=\"https:\/\/carajput.com\/blog\/tag\/procedure-for-conversion-of-a-firm-to-llp\/\"> conversion<\/a> of a share certificate from its present physical form to electronic form for\u00a0the identical\u00a0number of holding.<\/li>\n<li>It provides scope for having a paperless trading system using state-of-the-art technology, whereby share transactions and transfers are processed electronically without involving any share certificate or transfer deed after the share certificates\u00a0are\u00a0converted from physical form to electronic form.<\/li>\n<li>It attempts to avoid the time consuming\u00a0and complicated\u00a0process of getting shares transferred\u00a0within the\u00a0name of buyers\u00a0further\u00a0its inherent problems of bad deliveries, delay in processing\/ fraudulent interception in postal transit, etc.<\/li>\n<li>Dematerialization of shares is optional and an investor can still hold shares in physical form. However, he\/she\u00a0should\u00a0dematerialize the shares if he\/she wishes to sell\u00a0the identical\u00a0through the Stock Exchanges. Similarly, where an investor purchases shares, the requisite number of <a href=\"https:\/\/carajput.com\/blog\/valuation-of-unquoted-shares-an-analysis\/\">shares<\/a> will directly get credited into their demat account.<\/li>\n<li>The Depositories Act 1996 has been enacted to manage the matters related and attendant the operation of Depositories and demat operations. Two Depositories are operative\u00a0 are below mentioned\u2013\n<ul>\n<li>National Securities Depository Limited (NSDL) and<\/li>\n<li>Central Depository Services Limited (CDSL).<\/li>\n<\/ul>\n<\/li>\n<li>SEBI has long been insisting that each one physical share should be converted to the digital format.<\/li>\n<li>Why has the capital markets regulator been\u00a0bent on\u00a0this? Such an exercise will make the settlement process quicker and easier.\u00a0it&#8217;ll\u00a0also help eliminate fraud committed by share transfer agents. Shell companies too will have\u00a0a troublesome\u00a0time\u00a0managing\u00a0the electronic mode.<\/li>\n<li>Now, SEBI has cracked the whip. The capital markets regulator has set a deadline of 1 April 2019 for completion of the migration process. SEBI provided that such a system of having an electronic bookkeeping, will bring transparency in the trading system of the capital markets.<\/li>\n<li>The tax authorities will find it easier\u00a0to trace\u00a0shareholders and identify\u00a0the 000\u00a0beneficiaries.\u00a0detain\u00a0mind that\u00a0the dearth\u00a0of transparency has been bothering\u00a0the govt\u00a0for quite\u00a0a while.<\/li>\n<li>If\u00a0you continue to\u00a0retain physical share certificates,\u00a0it&#8217;s\u00a0time to convert physical shares to demat now.\u00a0this will\u00a0be done easily\u00a0during a\u00a0matter of two\u00a0to 3\u00a0weeks.<\/li>\n<li>Till now, Dematerialization of Shares was a compulsory requirement for a listed entity to own its 100% promoter shareholding and 50% non-promoter shareholding in demat form. But now, as part of its drive to lift the company veil, target benami transactions and produce more transparency, the govt plans to form it compulsory for unlisted Companies to urge their shares dematerialized, in keeping with organization.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"DEMAT_SHARES_OF_COMPANY\"><\/span><span style=\"color: #000080;\"><strong>DEMAT SHARES OF <a href=\"https:\/\/www.caindelhiindia.com\/blog\/company-registration-of-online-sellers\/\">COMPANY<\/a><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Demat or Dematerialization is that the process by which a shareholder can get physical share certificates of a corporation converted into electronic balances.<\/li>\n<li>Converting physical shares into demat shares is usually mandated by investors while investing within the shares of an organization and is advisable for companies looking to boost equity funds. In this article we will discuss about glance at the method to demat shares of a personal company.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"BENEFITS_OF_DEMATERIALISATION_OF_SHARES\"><\/span><span style=\"color: #000080;\"><strong>BENEFITS OF DEMATERIALISATION OF SHARES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Transfer of shares\u00a0may be\u00a0very conveniently done\u00a0it&#8217;ll\u00a0take less time and no\u00a0taxation\u00a0shall be levied.<\/li>\n<li>Easy\u00a0account\u00a0of all the transactions\u00a0is\u00a0maintained.<\/li>\n<li>Sometime the share certificates wander off, destroyed because of fire, decay, etc. which isn&#8217;t the case just in case of dematerialization of shares.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"OPERATION_IN_DEPOSITORY_SYSTEM\"><\/span><span style=\"color: #000080;\"><strong>OPERATION IN DEPOSITORY SYSTEM<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The operations\u00a0within the\u00a0Depository System involve the participation of a Depository, Depository Participants, Company\/Registrars and Investors.\u00a0the corporate\u00a0is additionally\u00a0called the Issuer.<\/li>\n<li>A Depository (NSDL and CDSL) is\u00a0a corporation\u00a0where the securities on an investor are held in electronic form, through Depository participants.<\/li>\n<li>A Depository Participant\u00a0is that the\u00a0agent of the Depository and\u00a0is that the\u00a0medium through which the shares are held\u00a0within the\u00a0electronic form.\u00a0they&#8217;re\u00a0also the representatives of the investor, providing the link between the investor\u00a0and therefore the\u00a0company through the Depository.<\/li>\n<li>In both systems, the transfer of funds or securities happens without\u00a0the particular\u00a0handling of funds or securities. Both the banks\u00a0and also the\u00a0Depository are\u00a0answerable for\u00a0safe keeping of funds and securities respectively.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"PROCESS_OF_DEMATERILISATION_OF_SHARES\"><\/span><span style=\"color: #000080;\"><strong>PROCESS OF DEMATERILISATION OF SHARES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>To start with,\u00a0you&#8217;ve got\u00a0to settle on\u00a0between\u00a0the assorted\u00a0depository participants available\u00a0within the\u00a0market to open the demat account.\u00a0you&#8217;ll\u00a0need to\u00a0open an account with a Depository Participant (DP)\u00a0and obtain\u00a0a novel\u00a0Client ID number.<\/li>\n<li>Thereafter,\u00a0you&#8217;ll\u00a0must\u00a0refill\u00a0a Dematerialization Request Form (DRF) provided by the DP and surrender the physical shares certificate, which\u00a0you would like\u00a0to be demitted to the DP.<\/li>\n<li>The DP upon receipt of the share certificates\u00a0and also the\u00a0DRF will send an electronic request to the company\u2019s registrar and share\u00a0agency\u00a0(RTA is an agent of the issuer. RTA acts as an intermediary between the issuer and depository for providing services\u00a0like\u00a0dematerialization, rematerialization) through the Depository for confirmation of demat. Each request will bear\u00a0a singular\u00a0transaction number<\/li>\n<li>The following documents shall be required to open the demat account, depending upon the entity type\u00a0and also the\u00a0requirements\u00a0of each\u00a0depository participant:<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Board Resolution\u00a0just in case\u00a0of Company.<\/li>\n<li>PAN of the Company\/Individual.<\/li>\n<li>Certified copy of INC-22\u00a0together with\u00a0paid challan of Company\/Proof of residence of individual.<\/li>\n<li>Photographs of Individual\/Authorized Signatory\u00a0just in case\u00a0of Company.<\/li>\n<li>Latest\u00a0revenue enhancement\u00a0Returns of the applicants.<\/li>\n<li>Proof of identity and residence of the directors\/promoters of the corporate.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<figure id=\"attachment_13237\" aria-describedby=\"caption-attachment-13237\" style=\"width: 1600px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-13237\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES.jpg\" alt=\"REQUIRED DEMATERIALIZATION OF PHYSICAL SHARES\" width=\"1600\" height=\"805\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES.jpg 1600w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES-300x151.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES-1024x515.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES-768x386.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES-1536x773.jpg 1536w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/REQUIRED-DEMATERIALIZATION-OF-PHYSICAL-SHARES-800x403.jpg 800w\" sizes=\"(max-width: 1600px) 100vw, 1600px\" \/><\/a><figcaption id=\"caption-attachment-13237\" class=\"wp-caption-text\"><span style=\"color: #ffffff;\">REQUIRED DEMATERIALIZATION OF PHYSICAL SHARES<\/span><\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"DOCUMENTS_REQUIRED_DEMATERIALIZATION_OF_PHYSICAL_SHARES\"><\/span><span style=\"color: #000080;\"><strong>DOCUMENTS REQUIRED DEMATERIALIZATION OF PHYSICAL SHARES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Application in respect of admission as Issuer of Specified Eligible Securities.<\/li>\n<li>Net worth certificate from a\u00a0comptroller\u00a0as per audited annual report for the last\u00a0yr.<\/li>\n<li>Certified and true copy of Board Resolution providing approval for dematerialization of the specified securities and shall also mention the name of signatories authorized by Board to execute documents and list of Authorized Signatories\u00a0together with\u00a0specimen signature.<\/li>\n<li>Confirmation letter from Registrar &amp;\u00a0agency<\/li>\n<li>Certified true copies of Memorandum &amp; Articles of Association\u00a0together with\u00a0Certificate of Incorporation.<\/li>\n<li>Certified true copy of Audited annual report for the last\u00a0fiscal year.<\/li>\n<li>If company has issued equity shares after latest\u00a0record\u00a0therein\u00a0case company\u00a0has got to\u00a0provide us certified true copy of PAS\u2010<\/li>\n<li>If\u00a0there&#8217;s\u00a0any variation in face value of shares or reduction in capital after the last\u00a0record\u00a0date\u00a0in this\u00a0case company\u00a0should\u00a0provide certified true copy of SH\u2010<\/li>\n<li>just in case of personal Limited Companies Additional Documents in variety of Undertaking is required.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"It_is_to_be_noted_that_it_generally_takes_around_15_%E2%80%93_30_days_for_opening_a_demat_account\"><\/span><span style=\"color: #000080;\"><strong>It is to be noted that it generally takes around 15 \u2013 30 days for opening a demat account.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Once demat account is opened, the request for conversion of physical shares\u00a0should\u00a0be made in \u201cDematerialization Request Form\u201d (DRF)\u00a0and also the\u00a0same\u00a0must\u00a0be deposited\u00a0along with\u00a0the share certificates to the requisite Depository Participant (\u201cDP\u201d).<\/li>\n<li>DP shall process the request to the corporate together with DRF and share certificates.<\/li>\n<li>Once the request is accepted by\u00a0the corporate,\u00a0the corporate\u00a0shall destroy the physical share certificates\u00a0and ensure\u00a0the dematerialization of shares to the concerned DP.<\/li>\n<li>The DP upon receipt of the share certificates and therefore the DRF will send an electronic request to the company\u2019s registrar and share agency (RTA is an agent of the issuer. RTA acts as an intermediary between the issuer and depository for providing services like dematerialization, rematerialization) through the Depository for confirmation of demat. Each request will bear a singular transaction number.<\/li>\n<li>DP will simultaneously surrender the DRF and therefore the shares to the corporate\u2019s registrar and share agency with a letter requesting the registrar and share agency of the company to verify demat.<\/li>\n<li>Company\u2019s registrar and share agency after necessary verification of the documents received from the DP will confirm demat to the Depository.<\/li>\n<li>This confirmation\u00a0is going to be\u00a0passed on from the Depository to the DP, which holds your account. Once the confirmation is received from the Depository, the DP shall credit the account with the number of shares so dematerialized.<\/li>\n<li>The DP will hold the shares within the dematerialized form thereafter on your behalf. And you&#8217;ll become beneficial owner of those dematerialized shares.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"REMATERIALIZATION\"><\/span><span style=\"color: #000080;\"><strong>REMATERIALIZATION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If\u00a0you&#8217;re\u00a0holding shares in electronic\u00a0style of\u00a0those company where mandatory requirement of dematerialization\u00a0isn&#8217;t\u00a0applicable,\u00a0you continue to\u00a0have\u00a0the choice\u00a0to convert your holding in physical form by submitting a Rematerialization Request Form (RRF) through your DP\u00a0within the\u00a0same manner as Dematerialization. Upon receipt of such request from your DP,\u00a0the corporate\u00a0will issue share certificates for\u00a0the amount\u00a0of shares so rematerialized.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24380\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/share-certificate..jpg\" alt=\"Basic about share certificate.\" width=\"862\" height=\"859\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/share-certificate..jpg 862w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/share-certificate.-300x300.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/share-certificate.-150x150.jpg 150w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/share-certificate.-768x765.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/10\/share-certificate.-800x797.jpg 800w\" sizes=\"(max-width: 862px) 100vw, 862px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"COMPULSORY_TRADING_IN_DEMAT_FORM\"><\/span><span style=\"color: #000080;\"><strong>COMPULSORY TRADING IN DEMAT FORM<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>The shares of\u00a0the corporate\u00a0are to be compulsorily traded in demat form; however, an investor can hold shares in physical form. Where an investor wishes to sell\u00a0the shares\u00a0through the Stock Exchanges, the same is required to be in dematerialized form only. Similarly, if an investor purchases shares, he\/she will get delivery of the shares in demat form only.<\/li>\n<li>Receipt of Annual Reports and other correspondence from\u00a0the corporate\u00a0after demat. The Depository Participants gives the list of demat account holders\u00a0and also the\u00a0number of shares held by them in electronic form on the Record date to\u00a0the corporate\u00a0(Beneficiary Persons,\u00a0called\u00a0Benpos).<\/li>\n<li>The rights of the shareholders, as to their holding shares in demat form, shall be par with their holders in physical form. Hence each shareholder is eligible to urge the Annual Report and can have the correct to attend the AGM further.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"CHANCES_OF_FRAUDDISPUTES_IN_EMPLOYING_A_DEMAT_ACCOUNT\"><\/span><span style=\"color: #000080;\"><strong>CHANCES OF FRAUD\/DISPUTES IN\u00a0EMPLOYING A\u00a0DEMAT ACCOUNT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Some of the common risk factors that applies to trading in physical shares are &#8211; mismatch in signatures, loss in postal transit, etc., while the same are absent in trading of dematerialized shares, since they are scrip less. In case of an\u00a0unlikely event of\u00a0the other\u00a0dispute, the concerned\u00a0exchange\u00a0and\/or Depository Custodian viz. NSDL\/CSDL or SEBI would\u00a0need to\u00a0be approached for resolving such issues.<\/p>\n<p>Pledging of shares in demat form for\u00a0the aim\u00a0of availing any Funding\/loan arrangement with banker. You will\u00a0should\u00a0contact your DP for this.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"FEE_FOR_BECOMING_A_MEMBER\"><\/span><span style=\"color: #000080;\"><strong>FEE FOR BECOMING\u00a0A MEMBER<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>At NSDL, the joining fees for an unlisted company is Rs.30,000 plus GST.\u00a0additionally,\u00a0to the joining fee, any issuer of listed securities is required to pay an annual custody fee at\u00a0the speed\u00a0of Rs. 8 per folio (ISIN position) in NSDL, subject to\u00a0the subsequent\u00a0minimum amount:<\/p>\n<table style=\"height: 339px;\" width=\"896\">\n<tbody>\n<tr>\n<td width=\"509\"><span style=\"color: #000080;\"><strong>VALUE OF SECURITIES ADMITTED (RS.)<\/strong><\/span><\/td>\n<td width=\"132\"><span style=\"color: #000080;\"><strong>AMOUNT (RS.)<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"509\"><strong>UPTO 5 CRORE<\/strong><\/td>\n<td width=\"132\">6,000<\/td>\n<\/tr>\n<tr>\n<td width=\"509\"><strong>ABOVE 5 CRORE AND UPTO 10 CRORE<\/strong><\/td>\n<td width=\"132\">15,000<\/td>\n<\/tr>\n<tr>\n<td width=\"509\"><strong>ABOVE 10 CRORE AND UPTO 20 CRORE<\/strong><\/td>\n<td width=\"132\">30,000<\/td>\n<\/tr>\n<tr>\n<td width=\"509\"><strong>ABOVE 20 CRORES<\/strong><\/td>\n<td width=\"132\">50,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"INVESTOR_ACCOUNT_FOR_SHAREHOLDERS\"><\/span><span style=\"color: #000080;\"><strong>INVESTOR ACCOUNT FOR SHAREHOLDERS<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In addition to\u00a0the corporate\u00a0becoming\u00a0a difficulty, the shareholders of\u00a0the corporate\u00a0must also become an investor under a depository participant\u00a0to carry\u00a0their shares of\u00a0the corporate\u00a0in demat form. Shareholders of\u00a0the corporate\u00a0can open a Beneficial Owner (BO) account with a Depository Participant (DP) of any depository.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><span style=\"color: #000080;\"><strong>CONCLUSION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Physical shares\u00a0are going to be\u00a0losing their validity very soon.\u00a0in keeping with\u00a0SEBI\u2019s ruling, migrating to the electronic or dematerialized format will\u00a0get\u00a0effect from April 2019. The market watchdog believes that electronic bookkeeping\u00a0is way\u00a0easier and it reduces\u00a0the chance\u00a0of forgery.<\/li>\n<li>Moreover,\u00a0it&#8217;ll\u00a0boost investor confidence\u00a0and produce\u00a0much-needed transparency into the\u00a0stock exchange. So,\u00a0this can be\u00a0the correct\u00a0time to open your demat account.<\/li>\n<li>Many people tend to believe that to convert physical shares to demat\u00a0may be a\u00a0cumbersome process. But\u00a0that&#8217;s\u00a0not true.\u00a0the method\u00a0is fairly simple\u00a0and might\u00a0be completed within two\u00a0to 3\u00a0weeks. Once the shares are dematerialized,\u00a0it might\u00a0lead to\u00a0more convenience for the investors.<\/li>\n<li>The buying and selling of shares could then be\u00a0worn out\u00a0a matter of seconds. Thus, shares in demat form, thereby safeguard an investor against the risk associated with the physical shares.<\/li>\n<\/ul>\n<p><strong>Popular Articles:<\/strong><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/new-online-filing-eform-dir-3-ekyc-directors-for-fy-2019-20\/\">New Online filing eForm DIR-3 eKYC Directors<\/a><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/closure-of-subsidiary-company\/\">CLOSURE OF SUBSIDIARY COMPANY<\/a><\/p>\n<p><a href=\"https:\/\/carajput.com\/blog\/compliance-for-foreign-subsidiary-companies-in-india\/\">Compliance for Foreign Subsidiary Companies in India<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overview on Dematerialization of Physical Share Certificates BRIEF INTRODUCTION Dematerialization (Commonly\u00a0called\u00a0\u2018Demat\u2019) signifies conversion of a share certificate from its present physical form to electronic form for\u00a0the identical\u00a0number of holding. It provides scope for having a paperless trading system using state-of-the-art technology, whereby share transactions and transfers are processed electronically without involving any share certificate or &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[258],"tags":[9973],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/2762"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=2762"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/2762\/revisions"}],"predecessor-version":[{"id":25839,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/2762\/revisions\/25839"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=2762"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=2762"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=2762"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}