• 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 1 month 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
94808 Answers
7553 Consultations

5.0 on 5.0

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
85004 Answers
2207 Consultations

5.0 on 5.0

You can borrow funds and do trading 

Ajay Sethi
Advocate, Mumbai
94808 Answers
7553 Consultations

5.0 on 5.0

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
85004 Answers
2207 Consultations

5.0 on 5.0

Yes you can do that 

Prashant Nayak
Advocate, Mumbai
31968 Answers
180 Consultations

4.1 on 5.0

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
27220 Answers
726 Consultations

5.0 on 5.0

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

Krishna Kishore Ganguly
Advocate, Kolkata
27220 Answers
726 Consultations

5.0 on 5.0

- 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
13264 Answers
198 Consultations

5.0 on 5.0

Dear client.

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

Anik Miu
Advocate, Bangalore
8939 Answers
110 Consultations

4.7 on 5.0

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