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Can physical shares held by a single holder be dematerialised into a joint demat account?

As per SEBI (WEB), if clients have not updated their KYC with their respective Registrar and Transfer Agents (RTA), their folios will be frozen from 1st April 2023, and they will not be able to dematerialise their physical shares. Clients are requested to contact their RTAs if their KYC is not updated. To learn more about RTAs, see What are Registrar and Transfer agents (RTA)?

Physical shares held by a single holder cannot be dematerialised in a joint demat account. To dematerialise shares, the name on the share certificate should match the name on the demat account. If an existing joint holder demat account is held with Zerodha, a new individual demat account must be opened to dematerialise the shares. See, Can I open more than one demat account with Zerodha?

Did you know?

Jointly held physical shares can only be dematerialised if the holders of the demat account are in the same sequence as the names on the share certificates. If the name sequence is different, a transposition form must be submitted. See What is the procedure for transposition and de-materialization of jointly held shares?

Example Scenario

  • Mr Arun and Mrs Banu are joint shareholders of SBI physical shares with a joint demat account.
  • Names on the share certificate are Mr Arun and Mrs Banu, where Mr Arun is the first shareholder, and Mrs Banu is the second.
  • The names in the jointly held demat account are Mrs Banu and Mr Arun, where Mrs Banu is the first holder and Mr Arun is the second holder.
  • To dematerialise SBI shares, they have to submit the transposition form, which is to be signed in the order of the names in the demat account. The form must be first by Mrs Banu and Mr Arun next.