Corporate rates are low , you make one cr , pay yourself 10lk , pay 22% -25 on companies net of 90lk. This is from my experience and interaction with CAs. Enhanced credibility and limited liability being the added perk
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Are you trading via a company account?
How did you manage to get a NBFC license or are you trading without it?
Out of 1 crore profits, salary is 10 lakhs. Tax on 90 lakhs is approx. 20 - 21 lakhs.
How will you withdraw the remaining 69 lakhs from pvt ltd company?
For a private limited company, you have to spend money each year for compliance which may cost you anywhere between 1 lakh and 3 lakhs.
Like I said depends on individual need. Practically why would you want to withdraw whole amount. If it’s the case llp is better.
Compliance too depends on the type of business and relation with CA.
Also you can adjust salary amounts according to your needs
You can work around not taking majority of the money out by giving salary to yourself or relatives, also interest on capital can be paid out. All these adjustment can be done to reduce the need to take out the money from the company for a long period of time.
The difficult part is the requirement for a NBFC license.
I think that condition makes using a Pvt Ltd difficult.
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As of now not in companies account. You can message me if you want to know something specific.
Just a curious question - what’s the tax implication for withdrawing money from an LLC after paying all the expenses and the salaries to the partner (this is also taxable on individual account) and the taxes I am drafting a very simplistic overview of my question. Pardon my ignorance 
Revenue = 150
All Expenses & Salaries - 50. Note the salary part is taxable on individual account
Income before Taxes = 100
Tax on LLP (30% of 100) = 30
Net Income after Taxes = 70
My question is how do we withdraw the remaining 70. Is there a dividend distribution tax applicable (in the hands of giver/receiver)? I read that there’s an exemption.
If the 70 is let say divided amongst 2 partners (35 each), do the partners have to pay either Income tax or tax on Dividend received?
If yes then either way it’s not beneficial as the resultant Income after taxes for the LLP has already been taxed at 30% (tax on LLP) and any additional taxes would be sub optimal
Provisions of section 10(2A) of the Income Tax Act exempts share of profit received by a partner in the total income of the partnership firm/LLP. The main objective of granting the exemption, under section 10(2A) to the share of profit received by the partner, is the avoidance of double taxation.
You are free to withdraw whole profit in your case-70. No ifs and buts . This is the case in LLP. No taxes for withdrawing profits in llp or partnership.
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These days a lot of Indian trading Gurus on youtube seem to be trading from their company accounts. Eg (P.R. Sundar, V.P FInancials, Shreyas Bandi of NiftyBN , Optionables.) How are these guys doing it then? Do they have NBFC? Seems unlikely or else, their main objective is training and their income through training is more than their trading income thus not requiring an NBFC licence. Is this a legit way to trade FnO without getting NBFC licence?
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On a lighter note, I am pretty sure their Training income > Trading income 
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@nithin if we take CSE membership then it will work ?
Because they are allowing to trade on NSE BSE AND CSE.
CSE is a member of NSE and BSE. So if you take membership of CSE, you are like an authorized person. This isn’t enough.
Efforts on to frame a charter for investors in securities can you tell me what is it
Hi All, has anyone managed to form a company/firm to do fno trading and/or investing?
No. MCA will reject at name reserve application stage itself.
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Hi @nithin .
Has there been a change in rule in relation to NBFC registration, is it true that the requirement is only for public Ltd company and not private limited company. I.e. can I trade in a private limited company (100% fno income) and still not be covered in the NBFC registration requirement.
No, there hasn’t been any change.
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I think you can take alpha membership today by depositing 25 lakhs without any charges . Can you confirm it? Also yes compliance costs would increase but do you think it will make sense if someone wants to scale up. You can handle 50 clients too along with propreitory trading.
Secondly I want to ask will banks provide bank guarantee to exchanges against FD if someone takes alpha membership.
Btw SEBI is talking about increasing networth requirement for membership on exchange. We will get to know in 2 to 3 months.
Getting membership isn’t enough, you need a trading platform and backoffice platform for all the reporting. These can cost you, doesn’t make sense to do this unless the AUM is alteast Rs 5crores.
There are restrictions now on Bank Guarantees. Btw the deposit with the exchange for membership can’t be used for BG.
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I think traders like optionables, vp financial, shreyas bandi etc have formed their companies without mentioning trading/investment as an objective. They’re nonetheless using it mainly for trading purpose. Shreyas Bandi hasn’t had a paid course till date. So they’re just using the loophole in the law. Form a company with a broad objective, use it for trading. Report it as business income and file taxes normally. Nobody came asking them why they haven’t taken NBFC license and they never had to reply. Don’t ask don’t tell.
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