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Question : Case Study 75

ABC Corporation is a well-known company with its shares listed on a stock exchange. The company's management is reviewing the concept of dematerialization.

Question : 

In dematerialization, what replaces physical share certificates?

Option 1: Trading orders
 

Option 2: Dividend checks
 

Option 3: Electronic records

 

Option 4: Ownership deeds


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 17th Jan, 2024

Correct Answer: Electronic records


Solution : The correct answer is (c) Electronic records

In dematerialization, physical share certificates are replaced by electronic records. Dematerialization involves converting physical share certificates, which are paper-based, into an electronic format. The ownership and details of the shares are recorded electronically, and these electronic records are stored in a dematerialized or demat account. This process eliminates the need for physical share certificates and instead relies on digital records to represent ownership of shares.

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