CHECKLIST FOR DEMATERIALISATION OF SHARES:

A private limited company can offer demat facility to its shareholders by admitting the
securities to the NSDL/CDSL. For that the company must first enter into a contract with an
Registrar & Transfer Agent (R&T Agent) who is responsible communicating with the
NSDL/ CDSL for all share credits and transfers.

Procedure for Opening Shareholder Demat Account:

1. To offer Demat facility to its shareholders, it first needs to make an amendment in its
‘Articles of Association.’
A special resolution needs to be passed by the company in the general meeting. Passing to
this resolution enable the company to issues shares to investors in the dematerialized or
electronic form.
2. Apply for dematerialization of the shares in National Securities Depository Limited
(NSDL) and Central Securities Depository Limited (CDSL) and obtain International
Securities Identification Number (ISIN) for each of its shares.
(Note :“ISIN” is a unique identification 12 digit alphanumeric number that is generally liked
to all kind of securities, i.e., security, shares, Debentures, Bonds, etc. and is offered by the
depository to companies going through dematerialization process).
3. The registered shareholder of the company first needs to open a Demat account with a
depository participant (DP) and obtain an account number.
Step 1: Visit the website of your preferred DP. (Which could be bank or stockbroker)
Step 2: Click on the 'open a demat and trading account' link.
Step 3: Fill in the demat and trading account opening application.
Step 4: Upload scanned copies of all the necessary Know Your Customer (KYC) documents.
(like address proof and identity proof (PAN card, Aadhar card, passport, etc), along with a
photo)
Step 5: Sign the agreement with your DP along with the schedule of charges. This agreement
contains the duties and responsibilities of both the depository participant as well as the
account holder.
Step 6: Once all the relevant documents are submitted, application will be processed by the
DP.
Step 7: Upon successful approval of your demat and trading account application, you will
receive a unique user ID and password for accessing trading account along with a demat
account number.
Raise a request for dematerialization of shares:
After opening of demat account, you need to place a request for conversion of your physical
share certificates into dematerialized format.
Step 1: Get in touch with your depository participant for a Dematerialization Request Form
(DRF).
Step 2: Fill up the DRF with all the required details and affix your signature. Forward the
duly filled form along with your physical share certificates to your DP. You’re required to
mention ‘Surrendered for Dematerialization’ on each of the physical share certificates.
Step 3: Your DP will process your request once they receive the DRF along with the
surrendered share certificates.
Step 4: A dematerialization request is sent by your DP to the company’s appointed Registrar
and Share Transfer Agent (RTA).
Step 5: If everything is in order, the issuer or R&T agent will accept the dematerialisation
request in his system and forward it to the NSDL/CDSL.
Step 5: Once the dematerialization request is approved, your physical share certificates are
destroyed & demat account gets credited with the relevant number of shares.

Note: Account opening charges and annual maintenance charges to be paid by the
Company which is leviable by DP from time to time.

Role of Registrar and Share Transfer Agent during the transfer of Dematerialized
Shares:
Registrar & Share Transfer Agent play a very important role in completing the transfer of
dematerialized shares as they are the ones which confirm with the concerned company before
making any approval to investor request for share transfer.
Registrar and Transfer Agents like Link Intime India and Karvy also handle the
documentation duties during the dematerialization process for the convenience of
investors/shareholders. All the background documentation work is actively done by R & T
Agent to support the demat process.