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DEMATERIALISATION OF SHARES OF PRIVATE /PUBLIC LIMITED COMPANY
@ Rs 15,999
WHAT IS DEMATERIALISATION OF SHARES?
Demat or Dematerialisation is the process by which a shareholder can get physical share certificates of a company converted into electronic balances.
As per new rules of ministry of corporate affairs, from October 2, 2018 issue of further shares and transfer of all shares by unlisted public companies shall be in dematerialised form only.
ADVANTAGES & BENEFITS
- Safe way to hold shares of a company – cannot be defaced or mutilated or stolen.
- Convenient – can be easily transferred electronically from one entity to another.
- Instant transfer of shares on authorisation.
- No stamp duty on transfer of shares.
- No risk of bad delivery of shares – fake share certificates, delays, bad delivery, missing certificate, etc.,
- Minimal paperwork.
- Reduction in transaction cost and legal cost.
DOCUMENTS REQUIRED
- Letter of intent cum Master Creation Form (MCF)
- Certified true copies of the audited Balance Sheet for last two years
- Certified true copy of Memorandum of Association & Articles of Association
- Confirmation letter from Registrar and Transfer Agent for common registry
- Net worth certificate from a Chartered Accountant
- Undertaking from company.
- List of Authorised signatory with Board Resolution with specimen signature
- If the company is already admitted in CDSL, the ISIN activation letter from CDSL to be submitted.
FAQs
Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form.
This cycle takes about 15 to 30 days after the submission of dematerialization request.
A depository is an organisation which holds securities (like shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities.
At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are registered with SEBI.
Dematerialised shares do not have any distinctive numbers. These shares are fungible, which means that all the holdings of a particular security will be identical and interchangeable.
Depositories provide “Transposition cum Demat facility” to help joint holders to dematerialize securities in different sequence of names. For this purpose, DRF and Transposition Form should be submitted to the DP.