Dematerialisation of Shares – Simplified with FilingHUB
Dematerialisation, or demat of shares, is the process of converting physical share certificates into an electronic format held in a Demat account. This transformation simplifies share management, enhances security, and facilitates seamless trading. Converting shares into Demat form reduces risks like loss, theft, or forgery of physical certificates and makes buying, selling, or transferring shares faster and more efficient.
Transparent Packages
ISIN activation and conversion.
- ISIN Generation
- RTA Coordination
- PAS-6 Filing
- AoA Amendment
FilingHUB provides expert guidance to companies and shareholders for a smooth and hassle-free demat transition. Convert your physical shares to Demat effortlessly with FilingHUB – Start Today!
What is Dematerialisation of Shares?
Dematerialisation refers to converting physical securities, such as share certificates, bonds, or debentures, into electronic form.
These electronic securities are held in a Demat account, maintained by a Depository Participant (DP) under SEBI-registered depositories:
• NSDL (National Securities Depository Ltd.)
• CDSL (Central Depository Services India Ltd.)
Demat accounts simplify securities management, enabling quick transfers, electronic settlements, and reduced paperwork.
**Dematerialisation of Shares for Private Companies**
In October 2023, the Ministry of Corporate Affairs (MCA) amended the Companies (Prospectus and Allotment of Securities) Rules, 2014, introducing Rule 9B, making dematerialisation mandatory for private limited companies, except small companies.
**Key Requirements Under Rule 9B:**
1. Issue of Securities – New shares must be issued in demat form only.
2. Conversion of Existing Shares – All physical share certificates must be converted to electronic format.
3. Promoters and Key Personnel – Shares held by promoters, directors, and KMPs must be dematerialised before issuing new securities.
4. Transfer & Subscription – Any share transfer or subscription must be in dematerialised form.
5. Compliance Deadline – Companies exceeding small company criteria after March 31, 2023, have 18 months to comply.
Process to Convert Physical Shares into Demat
Open a Demat Account
Complete account opening with a DP, providing bank and personal details.
Submit Demat Request Form (DRF)
Complete and submit DRF with physical certificates.
Verification & Approval
DP verifies the details and issues a Dematerialisation Request Number (DRN).
Forward to RTA
The DP sends the request to the company’s Registrar and Transfer Agent (RTA).
Conversion to Electronic Form
RTA approves the DRF, physical certificates are destroyed, and shares are converted.
Credit to Demat Account
Shares are credited to shareholders’ Demat accounts, ready for trading or transfer.
Compliance & Deadlines
Deadlines for Dematerialisation
- FY ending March 31, 2023: Deadline September 30, 2024
- FY ending December 31, 2023: Deadline June 30, 2025
Penalties for Non-Compliance
- Restrictions on securities transactions (No issuance/transfer)
- Limitations for shareholders (Cannot sell)
- Company Fines: INR 10,000 + INR 1,000 per day
- Officers’ Fines: Up to INR 50,000
Simplify Dematerialisation of Shares with FilingHUB
FilingHUB offers end-to-end assistance for converting physical shares into Demat form: Guiding private limited companies through MCA Rule 9B compliance, Coordinating with RTA and Depository Participants, Filing PAS-6 and other necessary documents, Ensuring a secure, hassle-free, and timely dematerialisation process. Convert your physical shares to Demat effortlessly with FilingHUB – Start Today!
Key Features of a Demat of Shares
Amend Articles (AoA)
Allow shareholders to hold shares in dematerialised form.
Appoint RTA
RTA manages the demat conversion process.
Obtain ISIN
Assign a unique International Securities Identification Number.
Promoter Demat
Promoters & KMPs must dematerialise first.
File PAS-6
Submit half-yearly returns to MCA.
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