Indian laws heavily depend on precedents, however different judicial persons see things in quite contrary light.
Here one is tip toeing on a grey area where as long as you are not caught out you will do just fine.
Even scams flourish in the meadows of ambiguity but are brought to light only when the flock increase and cover the green of the mead.
I actually found him very stupid. First of all he is doing illegal stuff. Over that he has made a YouTube video out of it.
People watch what they like to watch. Am sure there are 100s of videos which say a company cannot trade in stock exchange without necessary approvals. No… Nobody even talks about them.
The problem is the comfort wrought in knowing that PR S, IT J, Optionables, Alpha Leo etc are also registered likewise.
Haven’t seen the video, but trust it’s crap…
Anyway, per Zerodha’s article…
“ Firstly, an LLP with the objective of investing or trading is not allowed, so people use an alternate objective to create the LLP. This is a clear violation of MCA (Ministry of Corporate Affairs) rules. In the case of a Private Limited or Public Limited company, if more than 50% of revenue comes from financial income (trading), then the company is required to get registered as an NBFC (Non-Banking Financial Corporation) with RBI.”.
One does not expect them to make more than 50% of their revenues from trading, do they?.. other than carry-forward losses 
It’s revenue. Not profit. Since you guys are saying they do not have any other activity in the company, their revenue is 100 percent from trading.
I personally do not follow any of these.
For trading, revenue is profit, atleast per this post….
Yes you are right. It actually talks about ‘Income’ and not ‘revenue’.
Even if we trade using a sole proprietor or OPC - the tax on the company may be only 25%. But how do we take the money out ?
If we payout to our individual bank account - that amount is also taxable right?
Why do you want to take the money out? Spend the money as expense to the company.
@Nitin @Prakhar_Agrawal - I am a little confused with multiple replies on this thread, So here is my question most probably a repeated one but if you can help me understand this, it would be really helpful.
Thanks in advance!
We can trade(fno and share trading) if 100% fund is from unsecured loan from Director in Private Limited co ??
Then we don’t need NBFC Registration?
You will still need it. The income from trading F&O is still in the private limited company’s name doesn’t matter if the capital is equity or debt.
But no public money is involved. Own Money is used in pvt ltd.
Then also NBFC Registration required?
Hmm… yes and that is what I have mentioned many times above.
In the case of a Private Limited or Public Limited company, if more than 50% of revenue comes from financial income (trading), then the company is required to get registered as an NBFC (Non-Banking Financial Corporation) with RBI.
does this 50-50 rule apply to F&O or intraday in cash segment or both ?
Does one person company allowed to open corporate demat & trading account account ?
Any financial income. So even if you are a company with only Bank FDs and no other business, 50:50 will kick in, and you have to close the company or get an NBFC license.
An OPC can’t do any investments, so can’t open a trading and demat account.
OPC has only one shareholder so it is the most suitable for those who wants to invest/trade their own money.
SEBI allowed OPC to start broking business with condition that they can’t trade or invest.
It will be good if government allowed OPC trade in stock market in future.
So many asking if they can form a private limited company? What benefit do you guys really see?
they see “youtube guru” videos of people trading through private limited company and want to do the same so that they can pay 25% something in taxes instead of the maximum rate ~42.7% if your income is >5 crore.
Now i dont know if they are making 5 crore or more.
What about tax on dividend from the company which is again taxed in the hands of the shareholder?
Now you will say they will never give out dividends. How will they meet personal expenses?
I really wanna know what am I missing here. From past 2 years since I joined this forum I have seen so many members wanting to start a private limited company.