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Clarification for registration as an NBFC for LLP firms
12-Jun-2023 (In Corporate Law)
Will I need to register as an NBFC if I and 6 other known partners form an LLP and pool our money to solely invest and trade in stocks and derivatives in India?
Sir,
If your sole purpose is to invest then registeration with RBI as NBFC or an Investment company is important. Without registration no company can indulge in trading of stocks or derivatives. However, every company is free and well within its right to invest it's funds in securties markets.
But be reminded, what constitutes trading and what constitutes investment is a question of facts and will vary from case to case.
Not necessarily if you have purchased a stock today and sold it tomorrow will result into trading if your intention was to hold it as investment. Patterns and volumes will be crucial factors to decide that.
Regards,
Saqib Gigani.
If your sole purpose is to invest then registeration with RBI as NBFC or an Investment company is important. Without registration no company can indulge in trading of stocks or derivatives. However, every company is free and well within its right to invest it's funds in securties markets.
But be reminded, what constitutes trading and what constitutes investment is a question of facts and will vary from case to case.
Not necessarily if you have purchased a stock today and sold it tomorrow will result into trading if your intention was to hold it as investment. Patterns and volumes will be crucial factors to decide that.
Regards,
Saqib Gigani.
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Adv. Saqib Gigani
Mumbai | 100+ Answers
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