| Frequenty Asked Questions |
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Advantages of holding shares in Dematerialised Form
Converting physical holding of shares into demat holding helps the shareholder to get immediate transfer of shares. No stamp duty is payable on transfer of shares in demat mode and the shareholder can avoid risks associated with physical certificates such as forged transfers, fake certificates, bad deliveries and loss of certificates.
Dematerialisation (Demat) is the process by which the shares held in physical form are cancelled and destroyed and the ownership thereof is entered into and retained in fungible form in electronic mode on a Depository. SEBI has notified various Companies whose shares shall compulsorily be traded in demat form only.
Trading in demat mode is regulated by Securities and Exchange Board of India (SEBI). Presently there are two depositories functioning i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
Shareholders in Demat form are entitled to the following General Rights.
- To receive notice of general meetings and Annual Reports.
- To receive notice and form for Postal Ballots
- To participate and vote at general meetings either personally or through proxy.
- To receive dividends and other corporate benefits like bonus, rights etc.. once approved.
- To demand poll on any resolution at general meetings.
- To inspect statutory registers and documents.
- To require the Board of Directors to call an extra ordinary general meeting.
Following are the benefits of Demat
- Elimination of bad deliveries.
- Elimination of all risks associated with physical certificates
- No Stamp duty payable on transfer of dematted shares.
- Immediate transfer / trading of shares.
- Fast settlement cycle
- Faster disbursement of non-cash corporate benefits such as rights, bonus etc..
- Ease related to Change of Address, Nomination, Bank Mandates, as the shareholders have to deal with only one Agency covering holding of shares in demat mode of various Companies.
- Elimination of problems related with transmission of dematted shares.
- Ease in portfolio monitoring
- Ease of pledging of shares
- Pending status reports and information available on internet covering the entire portfolio through DP.
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Procedure for dematerialisation of shares
- Open a Beneficiary Account with a Depository Participant (DP) registered with SEBI
- Submit Demat Request Form ( DRF) as given by the DP duly signed by all the joint holders with names and signatures in the same order as appearing in the certificate(s) and the Company records.
- Obtain acknowledgement from DP on handing over DRF and share certificate(s).
- DP will take steps to log-in electronically Demat Request and forward DRF and Share Certificates to the Company / Registrars. Demat confirmations are required to be completed within 14 – 21 days from the date of receipt of documents by Company / Registrars.
- Receive confirmation statement of holding from the DP.
- If the shareholders have e-mail / SMS facility, request, the DP to confirm demat immediately through e-mail / SMS.
- Please do not send share certificates / DRF documents to the Company / Registrars directly.
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Procedure for recording change of address
Shareholders holding shares in physical form may send request letters duly signed by the sole / first named holder giving new address along with PIN code by quoting the folio number and name of the Company whose shares are held. Shareholders are also requested to furnish proof of their current address such as attested copies of Ration card / Passport / Latest Electricity or Telephone Bill / Lease Agreement etc. Please ensure that signature of the shareholders on request letter matches with the signature of the shareholder on Company’s records. Otherwise, shareholders will be required to satisfy the Company / Registrar by submitting documents as required in support of the changed signature i.e. PAN Card, Passport, Attestation of shareholder’s signature by Bank etc. For suggested format of letter please click here.
Shareholders holding shares in Demat form are requested to approach their DP for recording their change of address. |
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Procedure for registering change in name of the shareholders
After acquiring the shares in physical form, if there is any change in the name of the registered holders, shareholders are requested to send a request for registering change in name supported by attested copies of documents such as, Marriage Certificate, Gazette Notification, Court order etc. together with all the share certificates covering the entire holding along with Form for recording change of name with new signature in the changed name duly attested by Notary / Magistrate under their official seal. For suggested format of letters and Form please click here.
Shareholders holding shares in Demat form are requested to approach their DP for recording their change in name. |
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Procedure for Registration of Power of Attorney / Authority to another person to deal with shares.
Shareholders desiring to give authority to another person to deal with shares registered in their name are requested to execute a Power of Attorney in favour of concerned persons and submit notarized copy of the same to the Company / Registrars by quoting the folio number under which shares are held. After scrutiny of the documents, Company / Registrars shall register the Power of Attorney and inform the registration numbers of the same. Whenever a transaction is done by the Attorney, this registration number should be quoted in the communication.
Shareholders are requested to ensure that they certify the signature of the Attorney in the Power of Attorney Document. Otherwise Attorney’s signature needs to be attested by a Notary / Magistrate under their official seal supported by attested copy of the PAN Card of the Attorney. For suggested format letter please click here.
Shareholders holding shares in Demat form are requested to approach their DP for registration of Power of Attorney. |
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Procedure for registration of Nomination
Shareholders holding shares in physical form can avail the Nomination facility as provided under section 109A of the Companies Act, 1956. This facility is mainly useful for individuals holding shares in sole name. In the case of joint holding of shares by individuals, nomination will be effective only in the event of the death of all joint holders. Nomination can only be made in single name. Investors are advised to avail of the nomination facility by submitting the prescribed Form 2 B to the Company / Registrars.
However, if shares are held in dematerialized form, nomination has to be registered with the concerned DP directly, as per format prescribed by the DP.
There can be only one nomination for one folio. Folios having different order or combination of names of shareholders will require separate nomination.
Shareholders can revoke / vary the nomination once made. If nomination is made by joint holders, and one of the joint holders dies, the remaining joint holder(s) can make a fresh nomination by revoking the existing nomination.
Joint holders are not nominees. They are joint holders of relevant shares having joint rights on the shares. In the event of death of any one of the joint holders, the surviving joint holder(s) of the shares is / are the only person(s) recognized under Law as holder(s) of shares. Joint holders may together appoint a nominee.
Non-Resident Indian (NRI) shareholders can avail of Nomination facility. But a Power of Attorney holder of NRI shareholder cannot exercise this facility on behalf of NRI shareholder. NRI can be a nominee on repatriable or non-repatriable basis subject to Reserve Bank of India’s permission, as applicable.
Nominee can also be a Minor through a guardian.
Nominee is entitled to all the rights of deceased shareholder to the exclusion of other persons. In the event of death of the shareholder(s), all the rights of the shareholder shall vest in the nominee. In case of joint holding, all the rights shall vest in the nominee only in the event of death of all the joint holders. The nominee is required to apply to the Company / Registrars by reporting death of the shareholder(s) along with attested copy of the death certificate.
The nominee has an option to decide to register himself as a shareholder or he / she could send an application to have the shares transferred to any other person to whom the deceased shareholder could have otherwise transferred the shares. If the nominee opts to transfer the shares of the deceased holder to a third party, he / she should submit to the Company / Registrar transfer deed(s) duly stamped and executed along with relevant share certificate(s) and other documentary proof(s). |
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Procedure for transfer of shares
Investors should send share certificate(s) along with share transfer deed(s) in the prescribed Form 7B, duly filled in, signed by seller and buyer and affixed with share transfer stamps to the Company / Registrars. It takes about 10 – 21 days to process the transfer although the statutory time limit fixed for completing a transfer is one month under the Listing Agreement and two months under the Companies Act, 1956. Share Transfer Forms can be obtained from either registered Stock Brokers or Stock Exchanges. These forms are not available with the Company or Registrars.
The Government of India, Ministry of Finance, Department of Revenue has fixed the stamp duty on transfer of shares (whether with or without consideration) at the rate of twenty five paise (25 paise) for every Rs.100/- or part thereof of the market value of the shares on the date of execution of the transfer deed. The transfer deed is valid for a period of one year from the date of presentation date or till the next book closure date of the Company, whichever is later. In case the transfer deed has expired, the buyer may approach the Registrar of Companies to get the same revalidated.
Under SEBI guidelines, it is mandatory for the transferee(s) Buyer(s) to furnish copy of PAN Card to the Company / Registrars irrespective of the fact that the transaction is market or off-market transaction.
If the shares are returned under objection, the transferee needs to proceed to get errors / discrepancies rectified by contacting the Broker or Transferor (seller) or obtain replacement with good shares / refund of the consideration amount. After rectification or replacement of shares, the same can be re-submitted for affecting transfer. In cases where discrepancies / errors are non-rectifiable, the purchaser has recourse to seller and his broker through the Stock Exchange to get his money back. However, in case of off-market transactions, the matter has to be settled with seller only.
Shares can be transferred in the name of minor. In such case the transfer deed is required to be signed by the natural guardian / legal guardian on behalf of the minor.
In the case of Hindu Undivided Family (HUF), shares can be transferred in the name of the Karta of HUF and in the case of a Firm, shares can be transferred in the name of the Partner of the firm.
In the case of Trust, shares can be transferred in the name of the Trust only when the Trust is registered under Societies Registration Act, 1860. Otherwise, the shares can be registered in the individual name of the Trustee(s).
Shares can be transferred in the name of Non-Resident Indian provided the same are acquired on the basis of non-repatriation. Otherwise prior approval of Reserve Bank of India is necessary.
Conversion of single holding into joint holding or joint holding into single holding amounts to change in ownership of shares and therefore will amount to transfer of shares. Shareholders will therefore be required to follow the procedure of transfer which will attract stamp duty.
For transferring the shares received by way of gift, the receiver of gift will be required to follow the procedure of transfer which will also attract stamp duty. |
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Procedure for Transposition of Names i.e. changing the order of names of registered holders
In case of requests for changing the order of names of registered holders, a request duly signed by all the joint holders may be sent to the Company / Registrars along with Form of Transposition and all the share certificates covering entire holding which is known as “Transposition”. Transposition can be done only for the entire holding under a folio and therefore request for transposition of part holding cannot be entertained by the Company / Registrars. For form of Transposition, please click here.
For shares held in demat form, investors are advised to approach their DP concerned for transposition of shares. |
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Procedure for Deletion of names of deceased holder
If the shares are registered in joint names and when one of the joint holder is deceased, the surviving joint holders will have to submit a request letter supported by an attested copy of the death certificate of the deceased holder and accompanied by all the share certificates covering entire holding and Name Deletion Form duly signed by all the surviving joint holders. Under the present guidelines of SEBI, surviving joint holders are also required to submit their PAN Card details. Requests for deletion of name on part holding cannot be entertained by the Company / Registrars. For format of Deletion form, please click here.
In the case of a deceased holder who held shares in single / sole name, the heirs of the deceased holders will be required to follow the Procedure of Transmission.
For shares held in demat form, investors are advised to approach their DP concerned for deletion of shares. |
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Procedure for Transmission of shares
The legal heirs of shareholders who have not left any Will are required to obtain Succession Certificates or Letter of Administration listing therein details of such shares. Requests for transmission of shares should be sent to the Company / Registrars along with attested copy of the Succession Certificate / Letter of Administration, all the share certificates covering entire holding of deceased shareholder accompanied by Transmission Form duly signed by the legal heir(s). Requests for transmission of part holding of deceased cannot be entertained by the Company / Registrars.
The legal heirs of shareholders who have left a Will are required to obtain Probate of the Will from a Court of Competent jurisdiction and then send a request letter for transmission of shares to the Company / Registrars accompanied by attested copy of the Probate of the Will, all the share certificates covering entire holding of the deceased shareholder and Transmission Form duly signed by the legal heir(s). Requests for transmission of part holding of deceased cannot be entertained by the Company / Registrars. For format of transmission form, please click here.
If the legal heirs of deceased shareholders are not in a position to obtain Probate of the Will / Succession Certificate / Letter of Administration, they are requested to approach the Company / Registrars for transmission of shares explaining the reasons why they are unable to obtain Title to the shares of the deceased holder. After going through circumstances of each such request, the Company may consider transmission and suggest procedure and formalities for transmission without obtaining Title.
For shares held in demat form, investors are advised to approach their DP concerned for Transmission of shares. |
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Procedure for issue of duplicate share certificates
Shareholders who have lost / misplaced their share certificates are required to immediately report the loss to the Police Authorities by listing details of share certificates lost or misplaced such as Folio No., Name of Shareholder, Share Certificate No. and Distinctive Number of Shares. A certified copy of FIR / receipted copy of the Police Complaint reporting loss must be sent to the Company / Registrars along with a request letter quoting the folio number of the shareholder to the Company / Registrars to enable them to take note of “Stop Transfer” to prevent any further transfer of shares covered by the lost share certificates.
Thereafter the shareholder should send their request for issue of duplicate share certificate(s) accompanied by, Affidavit, Indemnity Bond, Surety Form, Proof of Income of the Surety and certified copy of FIR / Receipted copy of Police Complaint reporting loss of share certificate(s) and voucher copy of advertisement released in local newspapers regarding loss of share certificate(s).
After verification of the documents submitted, the Company / Registrars shall process the requests for duplicate issue of share certificate, which normally takes 4 / 6 weeks for the shareholders to receive duplicates from the date of receipt of all the valid documents by the Company / Registrars.
During the interim period, if the lost shares are received for transfer by the Company / Registrars, the shareholders will be required to obtain title to the shares from the Competent Court of Law before the duplicates could be issued. During the interim period, if the lost shares are retrieved, the shareholders are requested to write to the Company / Registrar for suspending the process of duplicate issue.
The shareholders are advised to surrender the original share certificates even if the same is retrieved after the issue of duplicate share certificate. Circulation of original share certificate in the market against which duplicate has been issued amounts to passing of adverse title and the registered holder will be liable to indemnify the innocent buyer of original share certificate, directly or indirectly, with or without the knowledge of the original shareholder. |
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Procedure related to receipt of Dividend
Dividend is paid to the shareholders as on Record Date for payment after the same is approved by the shareholders in their Annual General Meetings (except in the case of interim dividend declared by the Board of Director) in two modes i.e. (1) Payment by mailing dividend warrants / Drafts and (2) Payment of dividend through National Electronic Clearing Service (NECS).
The shareholders may authorize any other person to receive dividends on behalf of the shareholders. Requests from shareholders may be sent to the Company / Registrars furnishing the name and address of the authorized person / Bank / Branch Account Number along with Folio Number and current communication address of the Authorized persons / Bank. Thereafter the Company / Registrars shall send dividends to the Authorized persons / Bank. This facility is applicable only for the shareholders holding shares in physical form.
Procedure for receiving Dividend with Bank details on Warrants.
If the Shareholders wish to receive Dividend Warrant / DD at their registered address with particulars of their Bank & Bank Account details incorporated thereon, they are requested to provide their following bank details by quoting their folio. After recording the bank particulars, the Company / Registrars will send future dividend warrants to shareholders at their registered address after incorporating their bank details on the warrants. For suggested format of letter, please click here. Mandate - 1
Account No. :
Bank Name :
Branch Name :
Procedure in case where shareholders want the Dividend Warrants to be directly sent to their Bank
If the Shareholders want the Company to send the Dividend Warrant / DD to their bank directly for credit of the proceeds thereof to their account with the bank, they are requested to provide following details of their Bank Account to enable the Company / Registrars to do so. For suggested format of letter, please click here. Mandate - 2
Account No. :
Type of Account :
Name of the Bank / Branch :
Address of the Bank / Branch :
Procedure for receiving Dividend through ECS
If the Shareholders wish to receive their dividend through ECS, they are requested to ensure that they provide following information of their Bank Account and Bank / Branch details to the Company / Registrars in case of holders in Physical Mode to facilitate quick remittance of dividend through Electronic Clearing Service. For suggested format of letters, please click here. ECS -1
- Bank Account Number consisting of 12 + digit
- Type of Account
- Name of Bank & Branch
- 9 digit MICR Bank / Branch Code
Shareholders not having their bank accounts with Bank / Branch which is not operating under Core Banking System will not be able to receive remittance of Dividend through Electronic Clearing System.
Shareholders holding shares in demat mode are requested to provide the following information to their DP and not to the Company / Registrars as Bank their details are not maintained by the Company / Registrars. |
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Procedure to be followed in case of Non-Receipt of Dividend
In case of non-receipt of dividend or revalidation of Dividend Warrant, the shareholders are requested to write to the Company / Registrars, furnishing particulars of the dividend not received quoting the folio numbers (in case of physical holdings) and DPID & Client ID particulars (in case of holding in demat mode).
After checking the records Duplicate Dividend Warrant / Demand Draft in lieu of outstanding dividend warrant will be issued and sent to the registered holders. If the validity period of the dividend warrant has not expired, the shareholders will have to wait till the expiry date since duplicate warrant / Demand Draft cannot be issued during the validity period of the original warrant. On expiry of validity period, if the dividend warrant is still shows as unpaid in the records of the Company, duplicate warrant / Demand Draft will be issued. The shareholder will however be asked to execute an indemnity / undertaking before issue of duplicate warrant / Demand Draft in lieu of outstanding dividend
No duplicate dividend warrant / Demand Draft in lieu of unpaid dividend warrant will be issued in respect of dividends which have remained unclaimed and unpaid for a period of seven years in the unpaid dividend account of the Company as they are required to be transferred to the Investor Education and Protection Fund (IEPF) constituted by the Central Government.
Shareholders are requested to note that no claims shall be against the Company or IEPF for any moneys transferred to the IEPF in accordance with the provision of section 205C of the Companies Act, 1956.
The shareholders who have not encashed their dividend warrants within the validity period of the warrant are requested to send the warrant along with a request for issue of fresh Dividend Warrant which may either be revalidated or a fresh Warrant / Demand Draft in lieu thereof will be issued. |
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