How to Open a Demat Account for Trust & Required Documents?

Trusts require demat accounts for efficiently managing their investments in a centralized manner, while simplifying and streamlining the process of holding and investing in various securities. Trusts, whether public or private, can open demat accounts in India and there is growing interest among such entities these days when it comes to setting up these accounts. However, the trust has to be legally constituted with a valid trust deed, while the account should be operated as per this deed and resolutions passed by the trust for the same. 

Let us look at the stepwise process to open the account below along with the document checklist and some other key considerations. 

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Step-By-Step Process to Open a Demat Account for a Trust 

Here is a step-by-step procedure that has to be followed while opening a demat account for a trust. 

Step 1: Choose a reliable broker that provides the Demat Account services for Trusts.

Step 2: Enter the necessary details of the Trust and submit the required documents to the broker

Step 3: The broker will then verify all the information and documents and appove the application once everything is in order

Thereafter, the demat account of the trust will be activated likewise. 

Read More : How to Open a Demat Account for Partnership Firms & Required Documents           

Documents Required to Open a Trust Demat Account

Here are the necessary documents for opening a demat account as far as a trust is concerned. 

• PAN & Aadhaar Card of Trustees
• Address Proof (Bank Statement)
• Trust’s PAN
• Copy of balance sheet for the last 2 financial years (if not present then net worth certificate from CA)
• Registration/Incorporation Certificate of the Trust
• Trust Deed Copy
• Details of Trustees
• Board Resolution (on the firm letterhead) for opening demat account
• List of Trustees (on the firm letterhead)
• List of all Authorised Signatories (on the firm letterhead) (if any)
• Shareholding Pattern

Also Read : Demat Account for HUF - A Beginner's Guide

Points to Keep in Mind

Here are some pointers worth noting in this regard. 

• A demat account of a trust may only be operated by the authorised signatories mentioned in the resolution letter from the entity 
• Make sure you compare the AMC (account maintenance charges) of the depository with other reliable firms, along with checking associated costs and brokerage fees
• The time required to open a demat account may vary across DPs and is usually between a few days and 1-2 weeks on average
• You should be prepared for in-person verification (IPV) by the DP and may have to show your original documents during the visit. 

Read More : How to Open a Demat Account for Limited Liability Partnership (LLP) & Required Documents?

Conclusion

Choosing the right DP is a must for opening a demat account reliably and operating it in a simple and secure manner. You should compare multiple DPs based on multiple parameters before finalizing your decision. At the same time, providing the right documents and filling up all information accurately are essential to ensure a hassle-free and smooth process. A demat account can be immensely helpful for any trust, centralising investment management and security holdings in one place for maximum convenience.