How to open a mutual fund folio for a corporate (Company / Pvt Ltd / Pub Ltd)
A corporate mutual fund folio is held in the name of a registered company (Pvt Ltd, Public Ltd, OPC, or Section 8). The Board of Directors authorises investments via formal resolution; authorised signatories operate on behalf of the company. KYC and FATCA documentation is more extensive than individual KYC.
Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC. No affiliate commission is earned. For substantial corporate investments, consult a CA familiar with corporate compliance.
Step-by-step procedure
See the procedure infobox above.
Eligible entities
| Type | Eligibility |
|---|---|
| Private Limited Company | Yes |
| Public Limited Company | Yes |
| OPC (One Person Company) | Yes |
| Section 8 (non-profit) | Yes (with specific approvals) |
| LLP (Limited Liability Partnership) | Use LLP folio procedure |
| Partnership | Use partnership folio procedure |
| Proprietorship | Use individual proprietor’s KYC |
| Trust | Use trust folio procedure |
| HUF | Use HUF folio procedure |
Board Resolution content
Standard Board Resolution should specify:
- Authority: “Board hereby authorises the company to invest in mutual funds…”
- Investment amount / categories permitted.
- Authorised signatories (typically 2 directors, or director + CFO).
- AMC(s) approved (or general authorisation).
- Reporting requirements.
- Modification authority.
A typical Board Resolution is 1-2 pages. AMC requires certified true copy with company stamp.
FATCA / CRS for corporates
Corporate FATCA / CRS form is more complex than individual:
| Question | Detail |
|---|---|
| Foreign Tax Identification Number | If foreign tax-resident |
| Active vs Passive NFFE | Active (>50% gross income from active business) or Passive |
| Substantial owners | Individuals owning > 10% of company |
| Reportable entity status | Per FATCA / CRS rules |
For Indian companies with no foreign ownership: typically classified Active NFFE; minimal reporting overhead.
Tax treatment for corporate MF
| Aspect | Corporate MF treatment |
|---|---|
| Tax rate | Per company tax slab (22% / 25% / 30%) |
| LTCG | 12.5% above Rs 1.25 lakh per Section 112A (equity) |
| STCG | 20% per Section 111A (equity) |
| Debt MF | Slab rate post FA 2023 |
| Section 80C | Available; limited |
| MAT (Minimum Alternate Tax) | Applies to companies; complex |
Corporate MF income aggregates with other company income for tax computation.
Operational considerations
| Aspect | Detail |
|---|---|
| SIP allowed | Yes |
| Switch / STP / SWP | Yes |
| Multiple AMCs | Yes; separate folios per AMC |
| Authorised signature change | Fresh Board Resolution + KRA update |
| Audit trail | Maintain corporate records of all transactions |
Common corporate scenarios
- Treasury investment: Idle cash parked in liquid funds.
- Strategic equity allocation: Portfolio of equity MFs.
- Risk-hedged debt: Diversified debt MF portfolio.
- ESG / sustainability mandate: Sectoral / thematic MFs.
Closing or restructuring
Company dissolution / merger:
- Folio holdings included in liquidation / merger.
- Special procedure for transfer of MF units in restructuring.
- Tax implications via Section 47 (no-tax-merger if qualifying).
See also
- How to open MF HUF folio
- How to open MF LLP folio
- How to open MF trust folio
- How to open MF minor folio
- How to comply with Companies Act for MF corporate
- How to handle HUF tax (MF)
- How to handle trust tax (MF)
- How to transition minor to major (MF)
- How to open Zerodha corporate account
- How to whitelist Kite IPs in corporate network
- How to claim ELSS Section 80C deduction
- Companies Act 2013
- OPC (One Person Company)
- Section 8 Company
- Pvt Ltd Company
- Public Ltd Company
- FATCA (Indian MF)
- MAT (Minimum Alternate Tax)
- Section 47 (no-tax-merger)
- Mutual funds in India
- AMFI
- SEBI
External references
References
- Companies Act, 2013.
- Income Tax Act, 1961.
- SEBI (Mutual Funds) Regulations, 1996.
- CBDT FATCA / CRS notifications.
- AMFI Best Practice Guidelines on institutional investors.