Zerodha corporate (private limited) account
Zerodha corporate (private limited) account is a trading and demat account opened in the name of a company incorporated under the Companies Act, 2013 (or its predecessor, the Companies Act, 1956) by Zerodha for the purpose of managing the company’s treasury investments and marketable securities. The account is a non-individual account and operates under the company’s PAN and corporate identity. The authorised signatory or signatories are determined by a board resolution, which governs all transactions on the account.
Zerodha opens corporate accounts for private limited companies, one-person companies (OPCs), public limited companies (unlisted), and in certain cases for entities such as producer companies. Publicly listed companies and institutional investors (foreign portfolio investors, mutual funds, insurance companies) are governed by separate regulatory frameworks and do not use Zerodha’s standard corporate account route.
Eligibility
The following types of entities may open a corporate account at Zerodha:
- Private limited companies incorporated under the Companies Act, 2013 (section 2(68)).
- One-person companies (OPCs) under section 2(62) of the Companies Act, 2013.
- Unlisted public limited companies under section 2(71) of the Companies Act, 2013.
- Producer companies under the Companies Act, 1956 provisions preserved by the Companies Act, 2013.
- Foreign companies registered in India under section 2(42) of the Companies Act, 2013 (subject to FEMA compliance and additional documentation).
The entity must:
- Hold a valid Corporate Identification Number (CIN) issued by the Registrar of Companies.
- Have an active PAN in the company’s name.
- Maintain a current account with a scheduled commercial bank.
- Not be under liquidation, struck-off status, or facing regulatory suspension.
Partnership firms, LLPs, and trusts have separate account-opening processes at Zerodha and are not covered under the corporate account pathway.
Regulatory wrapper
The corporate account operates under the following primary regulatory instruments:
Companies Act, 2013, governs the company’s legal existence, its powers to invest surplus funds, and the internal governance requirements (board resolutions, shareholder authorisations). Section 186 of the Companies Act sets limits on loans, guarantees, investments, and securities by companies (inter-company investments require shareholder approval beyond a threshold of 60 per cent of paid-up capital plus free reserves).
SEBI (Stock Brokers and Sub-brokers) Regulations, 1992, governs Zerodha’s role as broker.
SEBI (Depositories and Participants) Regulations, 2018, governs the demat account.
Prevention of Money Laundering Act, 2002 (PMLA), requires enhanced due diligence for non-individual entities, including verification of beneficial ownership in accordance with SEBI’s master circular on AML.
SEBI circular on beneficial ownership, requires disclosure of the beneficial owner (BO) of the corporate entity, defined as the natural person(s) who ultimately own or control the company, in accordance with the PMLA rules (typically any person holding 25 per cent or more of shares or voting rights, or those exercising ultimate effective control).
Documentation required
| Document | Notes |
|---|---|
| Certificate of Incorporation | Issued by the Registrar of Companies; confirms legal existence and CIN |
| Memorandum of Association (MoA) | Objects clause must permit investment in securities |
| Articles of Association (AoA) | Must permit the company to open brokerage accounts and invest in securities |
| Board resolution | Specific resolution authorising the opening of a trading and demat account with Zerodha and naming the authorised signatory |
| PAN card of the company | Mandatory |
| List of directors | With DIN (Director Identification Number) for each director |
| KYC of all directors | PAN and Aadhaar (or alternative ID/address proof) for each director |
| Beneficial ownership declaration | Names and shareholding details of all persons holding 25%+ of equity |
| KYC of beneficial owners | PAN and address proof of each beneficial owner |
| Bank account proof | Cancelled cheque or bank statement from the company’s current account |
| Latest audited financial statements | For income proof; required if F&O or commodity segments are sought |
| Net worth certificate | Signed by a Chartered Accountant; alternative to financial statements |
| GST registration certificate | If applicable |
| Photograph and signature of authorised signatory | For account records |
The MoA’s objects clause requires specific attention: if the company’s objects do not include investment in securities or treasury management, the company must first amend the MoA through a special resolution and file Form MGT-14 with the Registrar of Companies before applying for a Zerodha account.
Board resolution requirements
The board resolution is the cornerstone of a corporate account application. It must:
- Specifically name Zerodha Broking Limited as the broker and state the intent to open a trading account.
- Specifically name CDSL or NSDL (or Zerodha’s DP) for the demat account.
- Name one or more authorised signatories by designation and name.
- Specify whether joint signatures are required for transactions above a threshold.
- Be certified as a true copy by the company secretary (CS) if one is appointed, or by a director if the company is exempt from mandatory CS appointment.
The resolution must be passed at a duly convened board meeting (not a circular resolution, unless the Companies Act permits circular resolutions for the particular company structure in question) and entered in the minutes book.
KYC process
Zerodha does not support online eKYC for corporate accounts. The account-opening process is fully physical:
- Document compilation, All documents listed above are compiled by the company secretary or compliance officer.
- Submission, The physical application pack is submitted (courier or in-person) to Zerodha’s registered office in Bengaluru.
- AML/KYC verification, Zerodha’s operations team verifies the documents, conducts beneficial ownership checks, and cross-references with the Ministry of Corporate Affairs (MCA) portal for company status and director details.
- Account activation, Upon approval, trading and demat account credentials are issued to the authorised signatory.
The processing time for corporate accounts is typically longer than individual accounts (5–15 working days, depending on document completeness).
Segments available
| Segment | Available | Notes |
|---|---|---|
| Equity delivery | Yes | Subject to MoA objects and Companies Act section 186 limits |
| Equity intraday | Yes | |
| Equity F&O | Yes | Income/net worth proof required |
| Currency derivatives | Yes | Income/net worth proof required |
| Commodity derivatives | Yes | Income/net worth proof required |
| Mutual funds (via Coin) | Yes | Direct plans |
| IPO applications | Yes, via ASBA (bank-based) | UPI ASBA not available for corporate entities |
The Companies Act section 186 investment limits apply to all securities investments by a company: investments beyond 60 per cent of paid-up share capital and free reserves require prior approval by a special resolution of shareholders. Companies routinely obtain a standing shareholder resolution at the annual general meeting to pre-authorise investments up to the statutory limit.
Account opening fees and charges
| Fee head | Amount (INR) |
|---|---|
| Account opening fee | 200 |
| Demat AMC | 300 per year |
| Brokerage | Same as resident individual rate (flat INR 20 per order for intraday/F&O; zero for equity delivery) |
Tax treatment
Corporate income tax
Investment income of a company is subject to corporate income tax under the Income Tax Act, 1961:
| Company type | Tax rate (FY 2024-25) |
|---|---|
| Domestic company (turnover up to INR 400 crore in previous year) | 25% |
| Domestic company (turnover above INR 400 crore) | 30% |
| New domestic manufacturing company (section 115BAB) | 15% |
| Domestic company opting for section 115BAA (concessional rate) | 22% |
Companies opting for the section 115BAA concessional rate (22 per cent base rate, effectively ~25.17 per cent after surcharge and cess) must forgo most exemptions and deductions, including the indexation benefit and the LTCG exemption under section 10(38) (which was available before April 2018 and is no longer applicable post the Finance Act, 2018/2024 amendments).
Capital gains
For a domestic company:
- STCG on listed equity (STT paid): 20 per cent (Finance Act 2024).
- LTCG on listed equity (STT paid), gains exceeding INR 1.25 lakh: 12.5 per cent (Finance Act 2024); however, companies under section 115BAA are taxed at the normal corporate rate without this concessional capital gains rate, unless the LTCG is separately charged under section 112A.
- LTCG on unlisted securities: 12.5 per cent without indexation (section 112).
Dividend received
Dividends received by a domestic company from another domestic company are exempt under section 10(34) was applicable before FY 2020-21. Post FY 2020-21, dividends are taxable in the hands of the recipient company at the applicable corporate tax rate, with TDS at 10 per cent deducted by the payer company.
Companies may claim a deduction under section 80M for inter-corporate dividends to the extent dividends received from a subsidiary do not exceed dividends distributed by the holding company (to prevent cascading tax).
MAT
Companies are subject to Minimum Alternate Tax (MAT) at 15 per cent of book profits under section 115JB, if the tax payable on total income is less than 15 per cent of book profits. Capital gains on securities transactions are included in book profits for MAT computation.
Companies opting for the section 115BAA or 115BAB concessional regimes are exempt from MAT.
Investment powers and Companies Act compliance
Section 186 investment limits
Section 186 of the Companies Act, 2013 regulates the extent to which a company may make investments in securities. A company may not, without prior approval by a special resolution of shareholders, directly or indirectly:
- Give any loan or guarantee or provide any security in excess of 60 per cent of its paid-up share capital, free reserves, and securities premium account; or
- Make investment in excess of 60 per cent of its paid-up share capital, free reserves, and securities premium account.
This limit is computed on an aggregate basis across all loans, guarantees, securities, and investments made by the company. For companies whose primary business is investment (non-banking financial companies, holding companies, insurance companies), the RBI, IRDAI, or SEBI provide exemptions from section 186 in their respective regulatory domains.
Companies routinely pass a general shareholder resolution at each annual general meeting (AGM) granting the board authority to invest up to the section 186 limit without further reference, thereby ensuring smooth operation of the Zerodha corporate account without requiring a shareholder meeting for each investment decision.
Objects clause compliance
The company’s MoA must authorise investment in listed securities. The Companies Act, 2013 reformed the objects clause requirement: under section 4(1)(c), the objects clause need only state the objects that the company proposes to pursue at incorporation. Many modern companies include a broad catch-all clause covering “investment in shares, debentures, and other securities”. Companies incorporated under the Companies Act, 1956 may have narrower objects clauses and may need to amend the MoA by special resolution (Form MGT-14 filing with the Registrar) before investing through a Zerodha corporate account.
Treasury management and Zerodha account integration
Purpose of corporate treasury accounts
Companies open Zerodha corporate accounts primarily for:
- Short-term treasury management, Deploying surplus cash in liquid ETFs, money market funds, or short-duration debt funds rather than parking in fixed deposits. Liquid ETFs (such as Nippon India ETF Liquid BeES) can be held in the demat account and provide near-FD returns with daily liquidity.
- Long-term strategic investments, Holding listed equity shares in group companies, associates, or investee companies as part of the corporate’s investment portfolio.
- Regulatory compliance investments, Certain companies (e.g., NBFCs) must maintain minimum investments in government securities or other approved instruments; these are held in the demat account.
Reporting obligations
Listed companies (not applicable to Zerodha’s private limited corporate account clients, who are unlisted) must disclose investments in listed securities under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Unlisted private limited companies must disclose investments in the notes to the financial statements under Schedule III of the Companies Act.
Companies must also report investments in the annual Form MGT-7 (Annual Return) and the Board’s Report under the Companies Act.
Operational considerations
Change of authorised signatory
When an authorised signatory resigns, is removed, or leaves the company, a fresh board resolution must be passed naming the new authorised signatory. The resolution, accompanied by updated director KYC if there is a director change, is submitted to Zerodha for its records to be updated.
Pledging
Corporate entities may pledge their equity holdings as margin for F&O trading in the same manner as individual accounts, through the CDSL/NSDL pledge mechanism.
Account dormancy
Dormancy rules apply to corporate accounts in the same way as individual accounts (no transaction in 12 months = inactive; 24 months = frozen). Reactivation requires a fresh board resolution and updated KYC confirmation.
Liquidation and striking-off
If the company is placed under voluntary liquidation (under the Insolvency and Bankruptcy Code, 2016) or is struck off by the Registrar of Companies, the demat account is frozen. The liquidator or the remaining directors (in the case of struck-off restoration) must provide appropriate legal documentation to Zerodha to effect a transfer or closure of the account.
Comparison with other entity accounts
| Feature | Corporate (Pvt Ltd) | HUF | Partnership firm | LLP |
|---|---|---|---|---|
| Governing statute | Companies Act, 2013 | Hindu law + IT Act | Partnership Act, 1932 | LLP Act, 2008 |
| Separate legal entity | Yes | Yes (for tax) | No | Yes |
| Beneficial ownership disclosure | Yes (25%+ shareholders) | No (Karta disclosed) | Partners disclosed | Designated partners disclosed |
| F&O available | Yes | Yes | Yes | Yes |
| UPI ASBA for IPO | No | No | No | No |
| Corporate tax applicable | Yes | No (individual slab) | No (partner slabs) | No (partner slabs) |
References
- Companies Act, 2013, sections 2(42), 2(62), 2(68), 2(71), 186.
- Income Tax Act, 1961, sections 10(34), 80M, 112, 112A, 115BAA, 115BAB, 115JB, 194.
- Finance Act, 2024, corporate tax and capital gains amendments.
- SEBI (Stock Brokers and Sub-brokers) Regulations, 1992.
- SEBI (Depositories and Participants) Regulations, 2018.
- Prevention of Money Laundering Act, 2002, and PMLA Rules, 2005.
- SEBI Master Circular on AML/CFT, SEBI/HO/AFRO/AFP/CIR/2023/0003, dated 3 January 2023.
- SEBI Master Circular on KYC, SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37, dated 8 March 2023.