Demat account opening.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2013 There has been a PARTNERSHIP FIRM with two partners namely HUF and Ind

Q.1 can this partnership firm make investment in stock market ( Listed seurities )?

Q.2 and if yes than depositry are not opening DEMAT ACCOUNT in the name of partnership firm they are opening d mat account only in the joint name of partners?

Q.3 what are the tax implications ( Long term and short term capital gain ) on equity shares if firm invest in listed shares

Q.4 wheather long term capital gain benifits are available to patnership firm or not?

Q.5 can assessing officer disallowed said long term capital gain on the ground of non existance of d mat account in the name of firm?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 February 2013 Answer 1, Yes, a partnership firm definitely can invest in stock markets

Answer 2, Depository can not say no for opening a demat account in the partnership name

Answer 3 tax implications remain same as in case of any other category of persons. LTCG is exempt. STCG taxable.

Answer 4 LTCG benefits are available for partnership firm

Answer 5 The issue of LTCG exemption won't arise in absence of demat account.

Shivang Chokshi

Shivang Chokshi (Expert)
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07 August 2016 beg to differ. demat cannot be opened in name of partnership firm. it has to be through partner that the dp is opened.

A Partnership firm cannot be a member of a Company. The membership has to be in the name of the partners of the firm. There is a clarification from the Department of Company Affairs stating that "a firm, not being a person cannot be registered as a member of the Company

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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07 August 2016 thanks for updating a very old query. You are right to the extent of name in which the account shall be opened. It shall be in the name of Authorized partner.