I would like to invite views on having a Demat Account on business name instead of personal name. Just like Rakesh Jhunjhunwala invests through Rare Enterprises.
What are the benefits of having a Demat account on Business name and how to open it?
1 Like
I don’t see any difference except the taxation benefits. I believe taxation will be applied as per the type of business it is. [Pvt. Ltd., LLP or Ltd.]. They can also deduct company expenses against all short term gains made. Secondly, they can raise money for the registered company and invest it via the company’s demat account.
1 Like
On that note, another question: Is it possible in India to set up a LLP structure in India where a “general partner” can manage money on behalf of “limited partners” who are investors in the LLP. Are they existing examples of this structure. I am basically referring to the “Buffett Partnership” model which WB used in the early years of his career.
It would be very tax inefficient as long term capital gains would not be tax free for LLP.
Business account can be opened as easily as individual account . Only paper work is much more.
Biggest disadvantage is capital gains. Often MAT is applicable which may compel you to pay upto 20% tax on all your share income even if it LTCG
1 Like