Hello sir, i want to know that can i trade in derivatives with my pvt ltd company with my own money. I have a newly formed company which i incorporated for my e com business. But can i trade using same company in detivatives. Kindly advice.
If a company’s financial assets constitute more than 50 percent of the total assets and income from financial assets constitute more than 50 per cent of the gross income then the company has to register as NBFC with RBI. So if you trade under company name you may have to register as NBFC.
Another option is to list as a member of the exchange.
Both options require fairly sizeable investment and comes with heavy regulator compliance requirements.
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In simple words. Answer is No.
It’s against the object clause mentioned in your MOA.
In addition to this whatever @t7support has mentioned is also to be considered.
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Thank for ur help sir. As my CA is saying i don’ require to get NBFC licence asim trading with my own money. And I’m not engaging in selling or distribution of any financial products to public. I’m very confused. But if this is the scenario, I better avoid using company for trading. Is there any cap on amount of money if I trade on my own as a individual? I heard that I have to audit my accounts if I cross certain threshold transaction limits. Thank you.
Yes my CA say same, that object not included these things at time of incorporation,but he said he will amend the object. If it gets approved, then can I trade?
Won’t get approved without specific approvals. Tried so many times for my clients.
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Ah…very sad to hear this. So looks like i have to trade on my own name. Thank u sir for your quick answer. Sir, is there any limit of capita uses in trading on individual basis? I heard I have to audit my accounts if it cross some certain limit?
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Thank you so much dear.
The limit is not on the capital. Its on the turnover. Link for the same is already posted above
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So , as a individual if my turnover cross 5cr mark then? Do i have to pay penalty or something like that? Bcoz in above links its mentioned that now turnover limit has been revised from 2cr to 5cr. And to get audit one need to be in 5 cr+ limit or below 5 cr also get audited? And taxes has to be paid on 6% of turnover, right sir?
No penalty. You just have to get your books audited.
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