What kind of company structure ideal to prop trade?

[turtlet]

Hi All

My intention is to create an audited track record of my trading and hence trying to understand the correct way to set-up the trading account. I have a few options

1) continue with my existing individual trading a/c
2) open a sole proprietorship
3) open a pvt ltd company
4) partnership

As of now the company will be funded by me alone (can get in a sleeping partner in case partnership is the best option) and the business of the company will be to trade nifty/forex/commodities in order to generate trading profits. Im keen to hear your views on whats the best option here in terms of

1) taxation
2) scalability? i.e if i decide to accept friends and relatives monies at a future date which structure is more geared towards doing this?
3) any regulatory restrictions on certain types of companies.

Thanks again.

 

[jahan]

Hi All

My intention is to create an audited track record of my trading and hence trying to understand the correct way to set-up the trading account. I have a few options

1) continue with my existing individual trading a/c
2) open a sole proprietorship
3) open a pvt ltd company
4) partnership

As of now the company will be funded by me alone (can get in a sleeping partner in case partnership is the best option) and the business of the company will be to trade nifty/forex/commodities in order to generate trading profits. Im keen to hear your views on whats the best option here in terms of

1) taxation
2) scalability? i.e if i decide to accept friends and relatives monies at a future date which structure is more geared towards doing this?
3) any regulatory restrictions on certain types of companies.

Thanks again.

Hello,

As far as i know.........

1) At present(as of now) ...sole proprietorship is best suited.

later on or anytime if u wish u can make this into PVT Ltd.

1)There r some Tax reductions for sole proprietorship and lots of other benifits(its depends upon state to state,..and sole proprietorship is encouraged by all State .Govts).

2)yes u can Accept cash,but to be able trade with others money u need to be registered with SEBI, and need to get some certifications.(visit there website and find out what u require).

3)U need to be regulated by SEBI.

 

[turtlet]

Hello,

2)yes u can Accept cash,but to be able trade with others money u need to be registered with SEBI, and need to get some certifications.(visit there website and find out what u require).

3)U need to be regulated by SEBI.

Thanks Jahan. A few thoughts on your reply

2) I thin kyou need SEBi certifications and portfolio-manager status is given only if one wants to accept public money and not friends and relatives. i.e. if one wants to publicly solicit. And PMs who have been so certified have restrictions. They should be long only and no naked futures selling etc.

With SEBI now allowing hedge funds to be set-up in India, I think a lot more of such companies will be set-up.