Physical Shares are those shares which are held in physical certificates by the Investors. Demat is an electronic form of preserving shares; that is paperless trading. Dematerialisation is the process by which a person can get physical certificates converted into electronic mode. Investments in shares and debentures can be held in electronic or dematerialised form with a depository which holds securities (shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors. In India, there are two entities—National Securities Depository and Central Depository Services. Unlike in physical shares, there is no scope for bad delivery or fake shares when we hold shares in demat form. Further, unlike physical certificates, there is no need to send the shares purchased to the company for transfer. Therefore, there is no scope for delay in transfer or for loss of share certificates in transit. There is considerable reduction in paperwork and transaction cost in demat mode. A Shareholder can view all his investments in listed companies or mutual funds in single account. Shareholder will receive all the corporate benefits like rights, bonus shares directly into his demat account and dividend into bank account registered in his demat account. Process involved in dematerialization? A Shareholder can get his shares dematerialized by submitting a Dematerialization Request Form (DRF) to its Depository Participant(DP). A DP is usually an intermediary between a shareholder and the Depository i.e. NSDl & CDSL. After submission of DRF, the physical share certificates are verified by the concerned authorities. Upon verification, the DRF team will convert all the physical share certificates into electronic form. It takes approximately 2-3 weeks for the DRF team to convert physical shares into Demat Form or electronic form. In case of death of a shareholder before converting his / her shares into demat mode, legal heirs will have to transmit the shares in their name and then get the dematerialization done in their respective names. In case of loss of physical shares, the shareholder will have to get the duplicate share certificates issued in his name from the Company. After receiving the duplicate share certificates, the shareholder can get his shares dematerialized by filling the DRF.