• Can I borrow money from friends and trade in stock market

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?
Asked 10 months ago in Civil Law

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9 Answers

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 

Ajay Sethi
Advocate, Mumbai
97429 Answers
7872 Consultations

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 

T Kalaiselvan
Advocate, Vellore
87624 Answers
2352 Consultations

You can borrow funds and do trading 

Ajay Sethi
Advocate, Mumbai
97429 Answers
7872 Consultations

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.

T Kalaiselvan
Advocate, Vellore
87624 Answers
2352 Consultations

Yes you can do that 

Prashant Nayak
Advocate, Mumbai
32806 Answers
209 Consultations

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.

Krishna Kishore Ganguly
Advocate, Kolkata
27508 Answers
726 Consultations

Take care to keep accounts of all the loans taken and reflect it in your IT Return.

Krishna Kishore Ganguly
Advocate, Kolkata
27508 Answers
726 Consultations

- 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. 

Mohammed Shahzad
Advocate, Delhi
14727 Answers
224 Consultations

Dear client.

In India there is no issue in borrowing capital from your friends and relative to do legal things. 

Anik Miu
Advocate, Bangalore
10355 Answers
121 Consultations

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