Don’t make the mistake of borrowing from friends and trading in shares
2) 91 per cent of investors lose money in trading
3) if you are unable to repay your friends they will sue you to recover the money and also file criminal case against you
I have a demat account and trade in my own Account. Can I borrow money from friends and family and use it for trading in my own account if they willingly give me on mutual understanding?
Don’t make the mistake of borrowing from friends and trading in shares
2) 91 per cent of investors lose money in trading
3) if you are unable to repay your friends they will sue you to recover the money and also file criminal case against you
Remember that you are borrowing the amount and not making them to invest this to your firm.
You are the one responsible to return whether you get profit or loss.
There is no legal infirmity to indulge in stock market trading activities with the borrowed amount
Thanks to both of you. So what I understood is that legally there is no hurdle to borrow capital from friends and family members and trade in my account.
It is as good as any kind of loan you may obtain from others.
You will be responsible only for returning the loan and not for the losses you may suffer.
1. Yes, why not? You can very well borrow money from your friends and relatives and us it for any purpose as per your wish including investment in stocks.
2. However, take care to make all the transactions including taking loans through bank so that you can submit accounts later on if asked by Income Tax or any law enforcement authority.
- As per law, a stock broker license is essential for starting the brokerage and trading of stocks business.
- Since, you want to invest others amount in the stock market , then it may create problem in case of loss , and they can file a complaint against you for the refund of the amount.
- Hence , you should inform them for the situation of the market before investing their amount in the said business.