Dematerialization stands for Converting Physical shares to In Digital record ,Just like how you did with your CASH once deposited into your bank account ,Once you deposit cash into bank ,The bank credit your account with Requisite Money and Took cash from you & once you give cash ,it will be added into total cash collection by Bank ,So here depository is something like Bank ,Which demat your holding of company's share ,into electronic form ,maintain your accounts ,Cr/Dr transactions and credit all the benefits Accrued in your a/c like Bonus issues .
So , Literally converting ,Physical shares to electronic is demat ,And one who is held such data is Depository ,Company who wish to Demat it's shares need to enter into Tripartite agreement with Depository (CDSL/NSDL)and Registrar & share transfer agent ,once your holding converted into demat ,Your name is included by depository in List of beneficial owner ,And depository name will be entered by company in is register of member (ROM) as registered owner .
I suggest you to Visit NSDL and CDSL website FAQs and detail page to get more insights onit .
CAclubindia
