Benefits of a Depository System
To the Company
i) The depository system helps a company to maintain and update its shareholding pattern periodically. The company has knowledge of the beneficial ownership and their holdings at all times.
ii) The cost of issue of securities also gets lowered because of dematerialisation of securities.
iii) Another advantage of depository system is that large number of transactions can be settled promptly.
(iv) Distribution of dividends and issuance of rights shares and bonus shares will be quicker as the ownership can be easily identified.
v) The transfer process under depository system is quick and without any defects. Therefore, complaints against the company by investors have been drastically reduced in this respect.
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