Secure your Equity Shares in Demat form Now!
Dematerialisation of Shares
All you know about Dematerialisation
of Shares
Dematerialisation is a process through which
physical securities such as share certificates and other documents are
converted into electronic format and held in a Demat Account.
Dematerialisation offers flexibility along with
security and convenience. Holding share certificates in physical format carried
risks like certificate forgeries, loss of important share certificates, and
consequent delays in certificate transfers. Dematerialization eliminates these
hassles by allowing customers to convert their physical certificates into
electronic format.
It is mandatory for a Public Limited company to convert its shares in demat form and the same is expected to be very soon in case of Private Limited company.
Why
dematerialisation needed?
1. Handling
of paperwork related to shares in the physical format often led to errors and
unforeseen mishaps in the past.
2. Tracking
records and share documents with respect to transfer and upkeep transactions
was difficult.
3. The
authorities in charge of updating these documents could not keep up with the
increasing volume of share papers, which, if left unchecked, could cripple the
financial base of the Indian share market and associated businesses.
Types
of Depositories
There are two types of depositories registered with
SEBI. They are,
1. National
Securities Depository Limited (NSDL)
2. Central
Depository Services (India) Limited (CDSL)
Benefits
of dematerialization
1. You
can conveniently manage your shares and transactions from anywhere
2. Stamp
duty is not levied on your electronic securities
3. Holding
charges levied are nominal
4. Risks
involved with physical securities such as theft, loss, forgery or damage are
eliminated
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