Requirement of Demat Account (Importance of Demat Account):
(1)Preserve Share Certificate : As share certificate are preserved in electronic form, no need to preserve them in physical form.
(2) No need of Duplicate Share Certificate : When the certificate received in physical form lost, destroyed, torn or damage then to get duplicate share certificate share certificate, the shareholders have to go for long and costly procedure. But in demat account, they don’t have to follow all this procedure. By simply crediting Demat account shares get transferred.
(3) No need of Share Transfer form: Transfer of share is easy after opening Demat account. There is no need of transfer form and signature on it.
(4) No problem of fake or forged signature : There was a problem of fake or forged signature on purchase or sale of physical form of share. This kind of problem does not arise on the transfer of Dematrialised share.
(5) No need of delivery through post departments : The transaction of purchase and sale is done online in Demat account. On sale of share, there will be debit effect in Demat Account and credit effect while purchase of share. Thus, the problem of delay in receiving shares by postal department can be removed.