Equity Trading - Private Limited Company - with own Funds

Trading
1

Hi - I already have a Private Limited Company with my family members as Directors - Company was formed for IT Services however it did not worked out -
Question is Can I Open a DMAT Account for my PVT LTD Company?
If Yes - Can I trade - and use the trading as the sole purpose of the business for 100% profit gains - will it be deemed as NBFC - Would like to avoid NBFC registration or License -
if I continue to trade using company DMAT account will there any penalties from RBI?

2

Yes, as per RBI guidelines, if more than 50% of profits come from investment activities, then you need to get registered as an NBFC.

I think it serves no purpose to trade using a corporate entity. Unless, you’re hiring traders for prop trading, it is best to do it under your individual name.

1 Like
3

Thanks for the response . I am already doing it under individual name - however would like to use trading as a business model for my company, would like to initially start with BSE/NSE and extend it to global trading exchanges as well.

Initially start with a small amount of around 50Lakhs, unless it increases till 2 CR - it won’t fall under NBFC?

4

This :arrow_down:

5

Yes, it’s allowed for private companies to open a Demat or trading account with any of the stock brokers and do the trading. You will just have to go through the documentation process of your stock broker to open an account.