1. Meaning: -
The process in which shares in the physical form are converted into electronic forms called dematerialization of the shares.
2. Account of shares: -
On dematerialization of shares, the account of the shares, the account of the shares in electronic form is maintained in the demat account by Depository Participant.
Shares are converted from original physical form into an electronic form.
Recently the SEBI made dematerialization compulsory for those shares and securities which are often traded on a large scale.
5. Possession of shares: -
Due to dematerialization, the actual possession of shares and security passes from the investor to DP.
1. The process in which the shares in an electronic form are converted again into physical form is called Rematerialisation.
2. On rematerialisation of shares, the account of the shares in physical form is maintained by the company.
3. Shares are converted from an electronic form again into physical form.
4. The process of conversion of shares from the electronic form again into the physical form is still optional and involuntary.
5. Due to rematerialisation the actual possession of shares and security passes from DP to the investor.