Dematerialisation of shares is the process of converting physical shares and securities into digital or electronic form. Concept of dematerialisation of shares is so far applicable for public Listed companies only wherein shares are held in Demat account of the shareholder and no physical copy of shares is required to be held.
Basic agenda of dematerialisation is to smooth the process of transfer, issuance, buying, selling etc of shares without any requirement of physical transfer of shares and requirement of filing form with RoC on each transfer.
Ministry of Corporate Affairs (MCA) has made a major amendment in Company (Prospectus and allotment of securities) Rules, 2014 though second amendment rules dated 27th october, 2023. All private companies, other than small companies, are required to convert their securities into Demat form within 18 months from the end of the Financial Year ending on 31st March, 2023.
This article contains a detailed discussion about provision of dematerialisation of shares, who is required to convert, process of conversion, due date of conversion etc.
As per newly inserted Rule 9B of Company (Prospectus and allotment of securities) Rules, 2014, every private company is required to convert their securities in dematerialised form except:
Further, Status of the company as “Small Company” or not is required to be checked on the last day of the Financial year ending on or after 31st March, 2023.
小型公司根据《2013年公司法》第2(85)条的定义，是指除公众公司以外，且符合以下条件的公司：
However, this clause shall not apply to:
Applicable private companies are required to dematerialise all securities held and are also required to issue new securities in dematerialised form only.
As per Rule 9B(2), an applicable private company, i.e., which is not a small company as on the last day of a financial year, ending on or after 31st March, 2023,is required to dematerialise its securities within 18 months of closure of such a financial year.
E.g.
Due date of dematerialisation of shares: 30th September, 2024
Status as on 31st March, 2024: Not a small company
股份非实物化截止日期：2025年9月30日
公司需遵循以下证券非实物化流程：
在证券非实物化过程中，股份由存管机构维护的电子账户持有。证券账户（Demat Account）等同于银行账户，证券以电子形式存放，并可轻松进行电子化买卖。存管参与者（DP）在投资者与存管机构之间充当中介。存管参与者协助在存管机构开立证券账户，并促进整个非实物化流程的顺利进行。
注册存管参与者（DP）名单可在印度国家证券存管有限公司（NSDL）或印度中央存管服务有限公司（CDSL）的网站上查询。
注册处及过户代理人（RTA）均在印度证券交易委员会（SEBI）注册。他们为已向公众发行股份的公司提供股份登记维护和股份过户相关服务。公司将从注册RTA名单中选聘代理人。
公司应与存管机构及RTA签署三方协议。该协议应明确各方承担的服务范围。
国际证券识别编码（ISIN）是一个用于识别证券的唯一12位代码。ISIN用于促进证券交易、清算和结算，特别是在跨境交易中。
在向DP和RTA提交所有文件并经核实后，存管机构将签发国际证券识别编码（ISIN），即每种证券的唯一代码。这对于在全球范围内准确、高效地追踪证券至关重要。
在开立证券账户后，公司应通知股东有关非实物化的事宜，并告知需遵循的流程。公司应向股东提供指导和协助，以便其在DP处开立证券账户。
The Company has earlier issued physical shares to the shareholders. Now such shares are required to be converted into Dematerialised form. The shareholders are required to follow below process:
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Similar to the company, the shareholders are required to open their Demat Account where they can hold their shares. Therefore, first shareholder is required to select a depository participant who can help in opening a demat account. Few popular examples of Depositary Participants are Zerodha, Groww, HDFC Securities etc.
Shareholder is then required to open his Demat account with the help of Depository participant through submission of Know Your Customer (KYC) documents and other documents as may be required. Opening a Demat is account is now an easy process and entire process takes 2-3 days only.
The shareholder shall submit his physical copy of share certificate with Depository Participant alongwith Dematerialisation request form (DRF) and other supporting documents.
The DP shall verify the information furnished in DRF and documents provided. Once the verification is complete, the DP shall forward the dematerialization request to the respective depository (e.g., NSDL or CDSL in India).
Once the depository verifies and approves the dematerialization request, the physical shares are canceled, and the equivalent electronic shares shall get credited in account of shareholder.
Dematerialisation of securities of unlisted companies is a welcome move as it will remove the requirement of keeping a physical copy of the share certificate and will ease the process of issuance and transfer of shares. However, it may be costly affair for the company.
