Dear Madam/Sir , We are group of 3 friends engaged in the business of F&O (Futures & Options ) trading . As we would like to set up a company , we decided to set up LLP . However the agency we have hired for the purpose of setting up the LLP has told us to set up Pvt Ltd since as per them LLP's cannot open demat / trading account or cannot engage in the business of derivatives , F&O trading . Please help me to understand if their understanding is right . Maintaining Pvt Ltd is an expensive affair and we have no plans to either raise external funds or give ESOP's etc. Please also tell which MCA code will be applicable in case LLP can be set up to do above business.
I don't think LLP cannot do such business as I haven't heard of any such restrictions.
Also practically we are consulting for one such LLP engaged in business of trading in shares so I don't think that will be an issue.
Also there is not much of a difference in expense between LLP and company.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Thanks Naman , Could you please also tell which MCA code is applicable for LLP for the above kind of business? Is it 65 or 66 or 74 ? I beleive only 1 code can be put , hence kindly advise
I am not sure about the code as I am a chartered accountant not a company secretary but it can be code no. 74 as no other suitable option available.
Hi,
In my opinion, there is no restriction for an LLP to do stock trading. However, in the past there were some issues while registering LLP for such business. Currently, I haven't heard any such issues.
For code, I need to check and get back to you.
- You can do F&O trading through LLP and open demat account in the name of LLP.
