Share Dematerialisation
Convert physical share certificates into electronic form, now mandatory for most private companies.
Dematerialisation converts physical share certificates into electronic holdings in a depository account. What was once a facility for listed companies has become a requirement for most private companies, and the compliance sits with the company rather than with its shareholders.
The consequence of not doing it is practical rather than theoretical: a company whose shares are not dematerialised cannot make a further allotment, and its shareholders cannot transfer their holdings.
What this costs
Electronic Connectivity with Depositories
₹56,049 plus GST
- ISIN (International Securities Identification Number)
- Covers paid-up capital up to ₹2.5 crore
What the company has to do
- Obtain an International Securities Identification Number for each class of shares
- Appoint a registrar and transfer agent
- Execute agreements with the depositories
- Ensure the register of members reconciles with the depository records
- File the half-yearly reconciliation of share capital audit report
- Facilitate shareholders in opening demat accounts and surrendering certificates
What stops working without it
A company that has not dematerialised cannot issue further securities — no rights issue, no bonus issue, no private placement, no employee stock option allotment.
Existing shareholders cannot transfer their shares either, which becomes acute during a fundraise or an exit. The requirement is most commonly discovered at exactly the moment it blocks a transaction.
The shareholder side
Each shareholder must open a demat account with a depository participant and submit a dematerialisation request with the physical certificates.
Where a shareholder’s name on the certificate differs from their PAN records, or where a holder has died and the shares have not been transmitted, the request is rejected. These are common in older private companies and take time to resolve, so they should be identified early.
How we handle it
- 1 Auditing the register We reconcile the register of members and identify name mismatches, untransmitted holdings and missing certificates before anything is filed.
- 2 Appointing an agent A registrar and transfer agent is appointed and the depository agreements executed.
- 3 Obtaining the ISIN An identification number is obtained for each class of shares.
- 4 Shareholder onboarding Shareholders open demat accounts and submit their certificates with dematerialisation requests.
- 5 Credit of holdings Holdings are credited to shareholder accounts and the register reconciled against the depository records.
- 6 Ongoing compliance The half-yearly reconciliation of share capital audit is set up as a recurring filing.
Frequently asked questions
Does this apply to private companies?
Most private companies are now required to dematerialise, with narrow exemptions for the smallest. The obligation sits with the company, not with individual shareholders.
What happens if we do not do it?
The company cannot make any further allotment of securities, and existing shareholders cannot transfer their shares. It typically surfaces when it blocks a fundraise or an exit.
Do shareholders need their own demat accounts?
Yes. Each holder needs an account with a depository participant, into which their holdings are credited once the physical certificates are surrendered.
What if a shareholder has lost their certificate?
A duplicate must be issued first, which involves an indemnity, an affidavit, a public notice and a board resolution. It is worth identifying these cases early because they take time.
Is there an ongoing filing?
Yes. A reconciliation of share capital audit report must be filed half-yearly, confirming that the register agrees with the depository records.
What is not included. Government fees, statutory charges, stamp duty, court and registry fees, digital signature costs and any third-party professional charges are separate and payable at actuals. GST applies on professional fees where indicated. Prices shown are indicative and may change without notice; we confirm the total in writing before any work begins — see our terms on pricing.
Talk to us about Share Dematerialisation
Share your requirement and our team will confirm the documents needed, the exact charges and a realistic timeline — usually the same working day.
- Expert document checking before submission
- Regular status updates on WhatsApp
- Transparent professional charges
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