- What it is: a demat account opened in the name of a business entity, not a person.
- Where it is held: with a depository (NSDL or CDSL), through a Depository Participant (DP).
- Who uses it: companies, LLPs, partnership firms, trusts/societies and HUFs — with category-specific rules.
- What is different: the holder is an entity, operated by authorised signatories named in a board resolution.
- Good to know: you cannot deal with a depository directly — only through a DP; the entity is the beneficial owner of the securities.
When a company buys shares, bonds, mutual fund units or other securities, it cannot hold them loosely in a director’s personal account. Just as an individual investor needs a demat account, a business entity needs its own non-individual demat account — commonly called a corporate demat account — to hold those securities in electronic form in the entity’s own name. This article is educational only; it is not advice to buy, sell or hold any security.
What is a corporate demat account?
A corporate (non-individual) demat account is a dematerialised securities account opened in the name of a business entity — rather than a natural person — so the entity can hold and transact in securities in electronic form.
“Demat” is short for dematerialised. Dematerialisation is the process of converting physical share certificates into an equivalent number of securities in electronic form, credited to an account held with a Depository Participant. Holding securities electronically removes the risks and friction of paper — loss, theft, forgery, damage and slow transfers — and lets securities move by book entry.
The securities-market term is a non-individual account; it is commonly called a corporate account. The difference from an individual account is in who holds it: the account is in the name of an organisation, not a person. That single fact drives everything else — the documents, the authorisations, the signatories and the way the account is operated.
How the depository system works
Securities are held with a depository and accessed through a Depository Participant. The depository is the registered owner on the issuer’s books, while the account holder remains the beneficial owner.
India has two depositories, both regulated by the Securities and Exchange Board of India (SEBI): the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL). They operate under the Depositories Act, 1996 and the SEBI (Depositories and Participants) Regulations, 2018.
- Depository (NSDL / CDSL): holds securities in electronic form and is the registered owner on the issuer’s register.
- Depository Participant (DP): the SEBI-registered intermediary through which you open and operate the account. A DP is the depository’s agent; you cannot bypass a DP and deal with the depository directly.
- Beneficial Owner (BO): the account holder — here, the entity — in whom the economic ownership of the securities vests. Each beneficial owner’s securities are kept segregated.
- Opening charges: under the depository framework, no investor is charged for opening a Beneficial Owner account, except statutory charges as applicable. Transaction and maintenance charges are separate and set out in the DP’s published tariff.
Who needs a non-individual demat account?
Several kinds of organisation hold securities in demat form — and the depositories treat them differently. Some “firm” accounts are not held in the firm’s own name.
| Entity type | How the account is generally held |
|---|---|
| Companies / bodies corporate | In the entity’s own name, under the “Corporate” / “Body Corporate” status, using the entity’s PAN. |
| Limited Liability Partnerships (LLPs) | In the LLP’s name, opened under the “Body Corporate” type with a “Limited Liability Partnership” sub-type. Nomination is generally not allowed for such accounts. |
| Partnership firms | In CDSL, an account cannot be opened in the partnership firm’s name — it is opened in the names of the partners (up to three), with the firm’s PAN captured. NSDL requires the partnership deed and partner documents. Treatment differs by depository. |
| Sole proprietorships | Not in the firm’s name — the account is opened in the proprietor’s name, with the firm’s PAN captured. |
| Trusts and societies | A registered trust/society account is generally in the entity’s name (with a trustees’/board resolution and registration proof). An unregistered society or a private trust is typically opened in the names of the trustees/members under the individual category. |
| Hindu Undivided Family (HUF) | A non-individual account. Under current NSDL rules it is opened in the name of the HUF entity (as per the HUF’s PAN) using the non-individual account-opening form, and operated by the Karta. Confirm the current position with your DP. |
In short: “corporate demat account” is a convenient umbrella term, but the depositories apply specific, category-by-category rules. Whether the account sits in the entity’s name or in individuals’ names depends on the entity type and the depository’s current operating instructions.
Why do businesses hold securities in demat form?
Businesses hold securities for ordinary, lawful reasons — and holding them electronically makes them easier to receive, reconcile and audit.
- Treasury and surplus deployment — investing surplus funds in market instruments as part of a board-approved investment policy.
- Strategic or group holdings — holding shares of subsidiaries, associates or other group entities.
- Receiving corporate actions — bonus issues, rights, splits and other entitlements are credited electronically to the holder’s demat account.
- Participating in the primary market — applying for and receiving allotments in electronic form.
- Record-keeping and audit — electronic holdings are easier to reconcile, value and audit than physical certificates.
Whatever the reason, the securities are held by the entity as beneficial owner, and all activity is governed by the entity’s own authorisations and by applicable law.
How does it differ from an individual demat account?
Both sit in the same depository system, but a corporate account is held by an entity and operated only through people the entity has formally authorised.
- Holder identity — the account is in the entity’s name (where permitted), not a person’s.
- Authority to act — an entity acts only through authorised signatories named in a board resolution (or an equivalent partners’/trustees’ resolution), which also sets out whether they sign jointly or severally.
- Documentation depth — beyond identity and address proof, entities typically provide constitutional documents (for a company, the Memorandum and Articles of Association), the authority to invest, financial statements, shareholding/control details and specimen signatures.
- Beneficial-owner identification — under SEBI’s anti-money-laundering framework, the DP must identify the natural persons who ultimately own or control the entity.
- Nomination — nomination that applies to individual accounts does not apply the same way to non-individual accounts; a non-individual entity also cannot be appointed as a nominee.
- Ongoing obligations — corporate accounts may carry periodic requirements (for example, resubmitting financial statements) that individual accounts do not.
How is a corporate demat account opened?
At a high level, opening a non-individual demat account follows the shape below. The exact forms, fields and documents are set by the depositories and your DP — treat this as an outline, not a checklist.
- 1. Choose a Depository Participant registered with SEBI (a DP of NSDL and/or CDSL).
- 2. Pass an internal resolution — the board (or partners/trustees, as applicable) authorises opening and operating the account and names the authorised signatories.
- 3. Complete the KYC and non-individual account-opening forms prescribed by the depository (for example, NSDL’s Form 11 for non-individuals / the CKYCR legal-entity format).
- 4. Submit the supporting documents — identity, address, constitutional documents, authority to invest, financial and control details, and specimen signatures.
- 5. Verification — KYC/in-person verification and beneficial-owner identification as required by the DP under SEBI/AML rules.
- 6. Account activation — on verification, the DP opens the account and issues the account (BO ID) details.
What documents are needed?
The authoritative, current document list depends on the entity type and the depository’s latest requirements, and should be confirmed before you rely on it. The categories below are indicative only.
Please note: the exact, up-to-date corporate-demat document checklist should be confirmed against the current NSDL/CDSL requirements (and with your Depository Participant) before it is relied upon. The categories below show the general shape of what is typically required — they are not a final list.
- Proof of the entity’s existence and constitution — e.g. incorporation / registration documents; for a company, the Memorandum and Articles of Association.
- PAN — of the entity (and, where applicable, of partners/proprietor/signatories).
- Authority to open and operate the account — board resolution or equivalent, naming authorised signatories.
- Authorised signatory details — list with specimen signatures and photographs.
- Ownership / control details — e.g. latest shareholding pattern and list of persons holding control; beneficial-owner (natural person) identification.
- Financial statements — where required, and periodically resubmitted for some entity types.
- Address proof — of the entity and, where required, of signatories.
Foreign, NRI and FPI entities
Where non-resident owners or foreign entities are involved, an additional layer of Reserve Bank of India (RBI) and foreign-exchange rules applies on top of the SEBI/depository rules.
- NRIs / OCIs typically invest through the Portfolio Investment Scheme (PIS), on a repatriation (NRE-PIS) or non-repatriation (NRO-PIS) basis, under the FEMA framework. Aggregate NRI holdings in a company are subject to statutory ceilings.
- Foreign Portfolio Investors (FPIs) and certain other foreign investors operate under the SEBI FPI framework together with the FEMA (Non-debt Instruments) Rules and RBI directions.
These are separate regimes with their own eligibility, account-type and reporting requirements. Any entity in this category should confirm the current RBI/FEMA and SEBI FPI rules before proceeding; this guide does not cover them in detail and is not a substitute for professional advice.
Frequently asked questions
Can a company hold shares in a demat account?
Yes. A company holds securities in a non-individual (corporate) demat account opened in the entity’s own name, through a Depository Participant of NSDL or CDSL.
Can a partnership firm open a demat account in the firm’s name?
In CDSL, no. The account is opened in the names of the partners (up to three), while the firm’s PAN is captured. NSDL requires the partnership deed and partner documents. Confirm the current position with your Depository Participant.
Who can operate a corporate demat account?
Only the authorised signatories named in the entity’s board resolution (or the equivalent partners’ or trustees’ resolution), in the manner that resolution sets out.
Is a demat account held with NSDL or CDSL?
With either. India has two depositories, NSDL and CDSL, both regulated by SEBI. Accounts are opened through a Depository Participant, not with the depository directly.
How is an HUF demat account held?
As a non-individual account. Under current NSDL rules it is opened in the name of the HUF entity (as per the HUF’s PAN) using the non-individual account-opening form, and operated by the Karta. Confirm the current position with your Depository Participant.
Sources
- SEBI — Depositories Act, 1996
- SEBI — SEBI (Depositories and Participants) Regulations
- SEBI — FAQ on the Depository System
- NSDL — Form 11 — KYC & Account Opening Form (Non-Individual)
- CDSL — DP Operating Instructions (as on 31 March 2025)
- RBI — Accounts in India by Non-residents (FAQ, 16 January 2025)
Open a corporate demat account with Nikunj Stock Brokers Limited
To open a non-individual (corporate) demat account, get in touch with Nikunj Stock Brokers Limited. Our team can take you through the account-opening process and the documents needed for your entity type.
Open your account →Nikunj Stock Brokers Limited · SEBI Stock Broker Regn. No. INZ000169335 (NSE/BSE/MCX) · Depository Participant Regn. No. IN-DP-89-2015 (NSDL & CDSL) · CIN U74899DL1994PLC060413.
Disclaimer
This article by Nikunj Stock Brokers Limited is for investor education only. It is not investment, legal or tax advice, and it is not a recommendation to buy, sell or hold any security. Depository and regulatory requirements change from time to time; the current rules of SEBI, NSDL, CDSL, the stock exchanges and the RBI (where applicable) prevail. The document categories described are indicative — please verify requirements with a SEBI-registered intermediary and read all applicable documents before acting.
Investments in securities market are subject to market risks, read all the related documents carefully before investing.