InvestorQ : Can a demat account be opened in the name of a trust or a Hindu Undivided Family (HUF)?
Katherine Gonsalves made post

Can a demat account be opened in the name of a trust or a Hindu Undivided Family (HUF)?

Answer
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Tisha Malhotra answered.
2 years ago


That is absolutely possible. A demat account can be opened in the name of a trust if the trust is registered under the Public Trust Act 1860 / Societies Registration Act / Bombay Public Trust Act / Public Trust Act in force in the state. If the trust is a private or unregistered trust then a demat account shall be opened in the name of trustees as an individual account. This subtle distinction has to be remembered in the case of unregistered trusts. If the trust has more than three trustees, then they will have to decide in whose name the demat account will be opened. A registered trust is treated as a judicial person.
What about opening a demat account in the name of a Hindu Undivided Family (HUF)? The answer is that a HUF cannot hold shares in its own name. Like you cannot have a DP account in the name of the partners of a partnership firm, so also you cannot have a DP account in the name of the HUF. You can have a bank account and trading account in the name of the HUF but not a DP account. In the case of HUF, shares can be held in the name of existing Karta on behalf of HUF. Karta is the head of the HUF and there are other coparceners. The Karta is normally the head of the family.