Employers investment policy for employee and their family members

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An individual joining a consulting firm that prohibits employees and their families from direct stock market trading faces a dilemma. Their family members actively invest and trade stocks. The discussion explores legal and manageable options for the family to continue their investments, such as forming a partnership firm or HUF, where stocks can be held in partner accounts and trading can occur under the firm's name. While a partnership is suggested as a viable route, consulting the company for explicit permission is advised, as partnerships might still be viewed as direct investment.

Deepak

Deepak (Querist)
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07 June 2025 An individual likely to join a consulting company which do not allow employee and their family members to invest or trade in stock markets directly. Family members of the individual has investment in stocks and trade in stocks actively. What option is left for the family members of the individual to keep their investment in stocks and can trade in stocks. Please suggest the option to keep their investments and trading in stocks as per law and manageable manner. Partnership firm of family members or HUF ? In partnership firm, stocks can be kept in DMAT of partners account and trading account can be in the name of partnership firm. Please advice the way and option.
Thanks in anticipation.
Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 June 2025 Yes, this is a good option.
Why the company putting such a condition.

Deepak

Deepak (Querist)
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08 June 2025 Thanks. Actually, the company provides consultancy to corporate world and probhit his employee and their family members to be active directly in stock market. Company allow only investment thro' mutual fund routes. Thus, the family can form a partnership firm and may continue their investment in the name of partners and may claim LTCG and STCG benefits.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 June 2025 Consult your company and get permission for investment through partnership.
Partnership also considered as direct investment.

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