Securing a physical share certificate has become a trendy approach in 2025. You can commence the process by transferring your physical shares into electronic form. Apart from that, you can dematerialize the shares to keep them secure. The process of securing physical shares has become a popular process in India.
When it comes to securing physical shares, it becomes a hectic task sometimes. It happens as the physical shares tend to get lost. Aside from that, there’s a chance that the share can get damaged or stolen. To protect your physical shares from these mishaps, you need to secure your shares.
Now the question is, how can you perform it? At present, the process of dematerialization is gaining popularity in India. You can opt for this process to secure your shares. It mitigates the risk associated with a lost share certificate. This process reduces the chances of shares getting misplaced. Aside from that, it also protects your physical shares from theft or damage.
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As of September 2024, there are around 175 million Demat accounts created in India. This indicates the monthly addition of 4 million accounts in the financial year 2025. As of February 2025, CDSL has observed 151.24 million Demat accounts. Meanwhile, NSDL reached 39.16 million demat accounts at the same time.
In this blog, you’ll learn how to secure your physical share. Apart from that, you’ll also learn a few details about the dematerialization process.
What is a Physical Share Certificate?
A physical share certificate is a document that companies issue to investors in the share market. After investing in a company share, an investor or shareholder receives a share certificate. It is a receipt of his/her share ownership. It indicates the number of shares they owned. A physical share also contains the company name, shareholder name, and certificate number.
However, in today’s fast-paced world, the physical shares have been replaced by technology. People are more into holding digital share certificates, and why not? In 2025, it will bring a lot of security. It happens as a physical share brings a lot of disadvantages. A physical share can get lost or stolen. Besides these, it can also get damaged. If this happens, it creates a lot of disruptions in the shared ownership.
Here are the disadvantages of physical shares:
Risk of Loss, Theft, or Damage
One of the main disadvantages associated with physical share certificates is that they can get damaged. Apart from that, the physical shares tend to be stolen. Sometimes, they can also be destroyed or lost. Later, it creates problems related to the share ownership. Later, claiming a duplicate share certificate becomes a difficult process.
Time-consuming Process
Issuing a physical share is a time-consuming process. An investor has to fulfill the mandatory legal requirements. They have to fill out the transfer deeds. Aside from that, they have to fulfill the stamp duty requirement and other formalities. It usually takes time to share a transfer. Sometimes, it takes several weeks to complete the procedure.
Limited Accessibility
Another major disadvantage of physical share is that it comes with limitesharesessibilitthey comeimes, a shareholder wants to transfer or sell his share. However, it takes a little time due to legal requirements. The shareholders have to pay for charges for handling and transferring the physical shares. The settlement takes an enormous time.
Issues Related to Inheritance and Succession
When a shareholder passes away, the number of shares he/she owned automatically transfers to the heirs’ account. However, it’s not an easy process in terms of physical certificates. If there’s no name of proper nomination, the transferring process takes time. In addition, it creates difficulties.
Costly Process
Holding and transferring a physical certificate also takes a lot of cost. The shareholders have to pay costs regarding the handling of physical shares. Apart from that, they have to pay stamp duty. Not only that, when it comes to transferring or selling, they also have to bear costs regarding the transfer of shares. If they lose it, they also have to pay for it during the issuance of a duplicate share certificate
Create Complexity in Maintaining Records
To enjoy the ownership of ownership, an investor or shareholder has to maintain a record of their shares. However, when it comes to physical shares, the process of maintaining records becomes a tough task. Apart from the share certificate, shareholders have to keep track of their dividends, tax filings, and more.
The Risks and Challenges of Holding Physical Share Certificates
There are several risks and challenges associated with holding a physical share certificate. Take a glance at them:
- Physical share certificates may get lost or stolen.
- Physical shares also have the tendency to get damaged or destroyed.
- It influences many fraudulent activities that are hard to stop.
- Sometimes, physical share certificates delay the transfer process due to the formalities.
- An investor suffers from a lot of administrative hassles if they hold a physical certificate. It is always a hectic task to handle physical share certificates. That’s why, in 2025, people are opting for the dematerialization process. It helps an individual to save share certificates in an electronic form.
Lost Share Certificates: What to Do
As mentioned, a physical share certificate tends to get lost. In this situation, it is treated as a lost share certificate. Now the question is how to recover from this situation?
If you lost a physical or original share certificate, here’s what you should do:
File an FIR (First Information Report)
First, go to a local police station and file an FIR. Complaint about your lost share certificates.
Inform the Company/Registrar
Next, inform the company or its registrar about the situation. Inform them that you’ve lost the physical certificates. Attach a copy of the FIR along with it.
Publish a Notice in a Newspaper
Publish a notice about your lost certificates in a newspaper. It may help everyone to be aware of the situation. In addition, it may prevent fraud.
Lodge a Claim with the Insurance Company (if insured)
Sometimes, shareholders make an insurance of their share certificates. So, if you have insured your physical share certificates, it is recommended to inform the insurance company. Don’t forget to attach the FIR copy.
Duplicate Share Certificate: The Complete Process
After losing a physical share certificate, shareholders can apply for a duplicate share certificate. However, before you apply for it, you have to know what a loss of share certificate is.
After losing a physical certificate, issues have been created. Therefore, a duplicate certificate assists a shareholder in gaining back their ownership. The process of issuing a duplicate certificate isn’t an easy task. They’ve to fulfill the legal requirements and formalities carefully.
Here’s the complete process:
Application to the Company/Registrar:
Inform the company registrar about your lost share certificate. After that, write an application for the issue of a duplicate share certificate.
Don’t forget to mention the important details of your original share certificates. It includes folio number, certificate number, number of shares you own, etc.
Indemnity Bond:
Next, sign an indemnity bond, which is an essential task for the issue of duplicate share certificates. Submit it with the application and send it to the company registrar.
According to Section 124 of the Indian Contract Act 1872, an indemnity bond works as an agreement between two parties. A shareholder has to confess the loss of their share certificates through this bond. It helps them to recover from the loss.
Affidavit:
In the next step, the shareholder needs to submit an affidavit. It must clear the doubts of lost share certificates. Apart from that, it must mention the circumstances.
With the help of an affidavit, the shareholder has to claim that the original share certificate hasn’t been sold or transferred but has been lost.
KYC Document has been entered:
Next, they have to fulfill the KYC requirements while submitting important documents, such as:
- PAN Card
- Proof of Identity
- Proof of Address
- Proof of Share Ownership
- Passport-sized photograph
Processing Time:
Now, the company registrar will take some time to process the request for a duplicate certificate. Usually, it takes only 2 to 6 weeks for processing. However, in some cases, it can take longer.
Fees and Charges:
The company may ask for certain fees from the shareholder for the issue of a duplicate certificate. It can be related to administrative fees, stamp duty, etc.
What is a Loss of Share Certificate?
Sometimes, when a shareholder loses a physical share certificate, it’s treated as a lost share certificate. A physical certificate can get lost easily. Later, it creates problems with the share ownership.
A lost certificate refers to the physical certificate that is lost due to certain circumstances. However, if someone lost a physical certificate, they can do the following:
File an FIR
Visit your local police station and complain. After that, obtain a copy of the FIR.
Notify the Company and RTA
In the next step, inform the company and its RTA about the lost certificate. Write an application while attaching the photocopied FIR.
Publish a Notice in the Newspaper
Next, publish a notice in the newspaper to prevent fraudulent transactions.
Indemnity Bond
After that, submit an indemnity bond and send it to the company RTA.
Apply for a Duplicate Share Certificate
After fulfilling all the above steps, it’s now time to apply for a duplicate notice.
Dematerialization: The Modern Solution
To secure your physical share certificate in 2025, you need to opt for dematerialization. In India, shareholders are opting for this method to enhance the safety of their share certificate. It certifies to ensure a safeguard for their share ownership. It’s not an easy task to manage your physical shares. Therefore, after opting for dematerialization, shareholders can simplify the management process.
Dematerialization helps investors convert their physical shares into a digital format. Later, they can maintain transactions and transfer easily. Here are the advantages of the modern dematerialization process:
Eliminates the Risk Associated with Physical Certificates
As mentioned, if you have a physical share, it can get lost. Apart from that, there’s a chance it can get stolen or damaged. After opting for dematerialization, you can get relief. It mitigates the risk associated with a physical certificate. Your share certificates won’t get lost, damaged, or stolen in digital format.
Faster and Easier Settlements
It takes a lot of time when you sell a share or transfer ownership. Meanwhile, if you opt for the dematerialization process, you can save a lot of time. Dematerialization ensures faster settlements. Therefore, you can transfer share ownership more quickly than the traditional method.
Reduced Paperwork and Costs
It takes a lot of formalities and costs while managing or issuing original share certificates. an investor and shareholder also have to pay a certain amount during the transfer of physical shares. However, when it comes to dematerialization, a shareholder gets rid of numerous paperwork and costs.
Convenient Process (holding and management of shares)
Dematerialization is also a contribution to holding shares in the traditional format. Sometimes, it takes a lot of effort to maintain records of numerous shares. However, with the help of dematerialization, the process has become an easy one.
How to Dematerialize Your Shares
Provide a brief overview of the dematerialization process
Protecting or securing a physical share certificate is an essential task for a shareholder. Nowadays, the majority of shareholders are opting for the dematerialization process. It helps them to convert their shares into an electronic format. In addition, it also guides them to maintain a smooth flow in share transfer.
Open a Demat account with a Depository Participant (DP)
The first step of dematerialization is to open a Demat account with the help of a depository participant, aka DP.
A DP can be a brokerage firm or financial institution. They work as a medium between shareholders and central depositories.
Submit a Dematerialization Request Form (DRF) to the DP
After submitting all the necessary documents, request a Dematerialization Request Form (DRF). Then, submit it to your DP.
Surrender the physical share certificates
Surrender all your physical share certificates to your DP. Provide all the details, including the folio number and the number of shares you owned.
The DP will process the request and credit the shares to your Demat account
The DP will take time to process your dematerialization request. They will verify all your physical shares.
Conclusion
Handling a physical share certificate is a hectic task. It happens because there’s a chance a physical share can get lost. Apart from that, it can also get damaged and stolen. The existence of physical shares may cause fraudulent transactions. Sometimes, a shareholder has to go through a lot of processes while transferring or selling the shares.
To get rid of these situations, shareholders are going for the dematerialization process. It helps them to protect their physical shares. In addition, it also consists of zero paperwork and less cost. With the help of the dematerialisation process, it has become easier to manage shares in electronic form.
In this blog, you’ve learned how to secure your physical shares. Furthermore, you’ve also learned about the modern dematerialization process.
Do you have any concerns? Get in touch with Infiny Solutions today to learn more about the dematerialization process.
RECOVER YOUR LOST WEALTH
Helping you liquidate your lost shares, unclaimed investments and dividends
UNLOCK YOUR WEALTH
Fill out the form below to contact us
