A physical share certificate is a paper document that serves as proof of ownership of shares in a company. It includes details such as the shareholder’s name, the company’s name, the number of shares owned, and the certificate number. Traditionally, investors received these certificates after buying shares, and any transfer of ownership required signing and submitting physical documents to the company’s registrar. This process was often time-consuming, prone to loss or forgery, and involved manual recordkeeping.

An electronic share certificate, often called a dematerialised or “demat” share, represents the same ownership rights but in digital form. Instead of holding a paper certificate, an investor’s shares are recorded electronically in a demat account maintained by a depository participant. This system eliminates the need for physical handling and greatly simplifies buying, selling, or transferring shares.

The main differences lie in security, convenience, and efficiency. Electronic certificates reduce risks of theft, damage, and forgery, while enabling faster settlement of trades. Physical certificates, on the other hand, require verification and manual processing for every transaction. Most modern stock markets have moved entirely to electronic systems, making trading smoother and more transparent. In essence, electronic share certificates represent the modernisation of ownership records, providing investors with a safer and more convenient alternative to traditional paper-based documentation.

A physical share certificate is a printed document that serves as proof of ownership of shares in a company. It contains details like the shareholder’s name, number of shares, certificate number, and company seal. Holding physical certificates requires manual handling, storage, and transfer, which can be time-consuming and prone to loss or forgery. In contrast, an electronic share certificate exists in digital form within a dematerialised (demat) account. It provides the same proof of ownership but eliminates paperwork, allowing faster and more secure transactions. Electronic certificates simplify trading, reduce administrative costs, and minimise risks associated with physical handling. Today, most stock exchanges and regulators encourage or mandate electronic formats to ensure efficiency, transparency, and convenience in managing and transferring shares.

A physical share certificate is a paper document issued by a company to prove ownership of its shares. It includes details such as the shareholder’s name, the number of shares owned, and the company’s seal. Physical certificates must be manually transferred, signed, and verified, making the process time-consuming and prone to loss or damage.

In contrast, an electronic share certificate exists in digital form and is stored in a demat (dematerialised) account. Ownership records are maintained electronically by depositories, allowing faster, safer, and more efficient trading or transfer of shares. Electronic certificates eliminate paperwork, reduce fraud risk, and make settlement nearly instantaneous. The shift from physical to electronic form has modernised capital markets, improving transparency, convenience, and security for both investors and companies.