Entities like companies and others who want to hold their securities in demat form will require having a corporate demat account. To open such an account, it will be important to understand the various eligibility criteria, documentations needed, and process of opening of such accounts prescribed by DP.
Knowledge about the above points will enable organizations to have all the necessary documents at hand while initiating the account opening process.
Understanding What Corporate Demat Account Is All About?
What is a Corporate Demat Account?
A corporate demat account is essentially an account opened by a business or organization for holding their securities in electronic mode. This account will allow the organization to keep its investment securities within a dematerialized framework.
Such an account can usually be opened in the name of the organization itself. This kind of account is normally subjected to several verification and documentation procedures laid down by the Depository Participant concerned. Holding of securities in demat form may assist in maintaining proper records of transactions.
Who Can Open a Corporate Demat Account?
Eligible organizations will be permitted to open their corporate demat accounts, provided they fulfill the prescribed conditions set by the Depository Participant concerned. Some of these eligible categories may include private limited company, public limited company, LLPs, HUFs, partnerships firms, societies/trusts, and others.
Comprehensive Offline KYC Document Checklist by Type of Entity
Opening of a corporate demat account will involve submission of several types of entity-wise KYC documents. The following is an indicative checklist.
Check-list of Indicative Documents Required
| Entity Types | Documentation Indication |
|---|---|
| Private Limited Company | Certificate of incorporation, PAN Card, MOA, AOA, Board Resolution, DIR-12 or equivalent and KYC docs of signatory |
| LLPs | PAN Card, Certificates of incorporation, LLP agreement, partner resolution and KYC of designates |
| HUF | PAN Card, Karta declaration and KYC docs of karta |
| Partnership Firms | PAN Card, Partnership deed, resolution and KYC docs of authorized representatives |
| Trust / Society | Registration Certificate, PAN Card, Governing Documents, Resolution and KYC Docs |
Note: These document requirements might differ from one Depository Participant to another.
Mandatory Documents Required for Opening Account by Private Limited Company?
Some of the indicative documents required may include certificate of incorporation, company’s PAN card, MOA, AOA, board resolution, KYC documents of signatories, ultimate beneficial owner declarations and much more.
Exact document requirements may differ based on the intermediary.
Process of Opening of Demat Account for Corporates
Opening process can be explained below:
Step-by-step Guide
Step 1: Compile the Relevant Documentation
Collect all the necessary documentation required for account opening.
Step 2: Take the Internal Approval or Board Resolution
Obtain the required internal approvals or board resolutions.
Step 3: Prepare the UBO Declarations
Prepare the UBO declarations, wherever applicable.
Step 4: Submit the Required Documents Along with the Application
Submit the required documents along with the account opening application.
Step 5: Undergo Mandatory Verifications
Complete any mandatory verification procedures, including IPV, if needed.
Is It Possible to Open Account Online?
Certain aspects of the opening process can actually be undertaken online. However, certain DPs might ask for physical documents and verifications.
Consult your Depository Participant regarding details regarding the onboarding process.
Conclusion
Through the use of a corporate demat account, organizations will be able to maintain their securities within a dematerialized account in electronic form. Prior preparation of all documentation and knowledge about KYC requirements will make the whole onboarding process easier. Consult your Depository Participant about exact doc requirements before proceeding further.
Disclaimer
This piece has been written exclusively for educational and information purposes only. Document requirements, KYC process, and practices involved may undergo changes at periodic intervals. Investors must refer to the latest guidelines provided by their Depository Participants while making any application.
