What is SHARE certificate ?



A share Certificate is a document issued by company evidencing that the person named in the certificate is owner of number shares of Company as specified in the Certificate.


Dematerialization is a process by which the physical share certificates of an investor are taken back by the Company and an equivalent number of securities are credited his account in electronic form at the request of the investor.


Rematerialization  is the process of converting securities held in electronic form in a demat account back in physical certificate form.



“Demat shares will not just help improve compliance with know-your-customer (KYC) norms, but will also prevent frauds by checking pledging or transfer of duplicate shares.”

Unlisted public companies have to compulsorily issue new shares in demat form beginning October 2,2018  the government, amid continuing efforts to curb illicit fund flows. Besides, transfer of shares by these companies has to be done only in the demat or electronic form. This step has been taken for “further enhancing transparency, investor protection and governance in the corporate sector,” the Corporate Affairs Ministry said in a release.

The Companies (Prospectus and Allotment of Securities) Rules, 2014, have been amended by the ministry. Every unlisted company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer are required to comply with certain requirements, as per the rules.


  1. According to the ministry, elimination of risks associated with physical certificates such as loss, theft, mutilation and fraud, would be a key benefit from the decision on having shares in demat form.
  2. Further, the move would help improve the corporate governance system by increasing transparency and   preventing   malpractices such as benami shareholding and back-dated issuance of shares, it said. The ministry noted that “exemption from payment of stamp duty on transfer” as well as ease in transfer and pledging of securities, are among the other benefits.
  3. Grievances of any security holder of unlisted public companies would be handled by the Investor Education  and   Protection   Fund (IEPF) Authority.