RBI NBFC

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Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2011 A company whose only business is to invest and trade in stocks and is not a registered stock broker then it has to registered it with RBI as NBFC ????

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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03 February 2011 Yes, only NBFC Company can have main business of Investing in shares & securities. If principal business of Company is to invest in shares and securities, NBFC Certificate is required.

Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2011 Sir,
For NBFC is there any minimum capital required for registeration ?

I am floating a company with friends and relative and maximum amount we can contribute is 10 lacs, so can you advice us what can be done ?

Incase if we are unable to register as NBFC due to low capital what option we have ?

Can we make a investment trust ? again what will be the cons and prons

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Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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04 February 2011 minimum Capital requirement for formation of NBFC is 2 crore.

No idea about Investment Trust

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Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2011 Sir, I dont have 2 crores so whats the solution if a person is not having 2 croers and he want to carry prinicpal business of shares investing

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 February 2011 You may do in Individual capacity and that will be better. Money can be easily borrowed if more funds are required for trading in shares.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 February 2011 Sir I am doing business in my individual capacity but I want to do share trading with one of my relative. So we thought of forming a co.

What is the solution according to you if I want to do share trading with someone ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 February 2011 "Trading in Shares"
and in this business
"Realtive as a Partner"
makes the issue highly speculative.
*
Open one more trading account in your relative's name and invest his funds thru
his account only.
*
As you are relative to each other," rely" upon each other, by entering into an oral understanding for profits and losses.
*
The share tradings can be stopped in the adverse circumstances easily. without
burdening the relationship.
*
May it remain as live as it is today.
*

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Querist : Anonymous

Querist : Anonymous (Querist)

13 February 2011 1) why you say this issue is " speculative"

2) as per your advice, we have decided to trade in our own account and distribute the profits earned in 1:1 ratio also the losses but then how will we pass the accounting entries and taxation. For example, at the end of the year, in my account there is a profif of 10 lacs and in his account profit of 20 lacs, so total profit is 30 lacs.

He is suppose to give me 5 lacs, now the Q is how willhe give me 5 lacs and what will be the accounting entry.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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14 February 2011 1) why you say this issue is " speculative"

Generally we have seen that whenever relatives come together to join their hands in business either they have achieved wonderful targets or they have miserably failed.
The relationship flourished as the profits have grown up. However, at the time when they suffered losses, their relationship has also broken.

I think you will not take it otherwise.

For your second query, I have given some clues, which could be understood in the light of a long time association.

Right now I am unable to answer here directly, but if there is a will, we shall find out the ways also.

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Querist : Anonymous

Querist : Anonymous (Querist)

14 February 2011 Parasji
Sir, if anything cant be said directly here , you can PM ( private message) me.