Account Variants: Partnership Firm and LLP

Why this page is structured this way: a partnership firm and an LLP look like the same client to a sales team and are completely different clients to a depository, because one is a legal person and the other is not. The page establishes that distinction first, then runs documents, mandate, screens and field deltas for both side by side, so the one decision that matters — whose name the demat account is opened in — is settled before any form is filled.

TL;DR

• An LLP is a body corporate; a partnership firm is not. Section 3 of the Limited Liability Partnership Act 2008 gives an LLP separate legal personality and perpetual succession. The Indian Partnership Act 1932 gives a firm neither, which is why the two are onboarded differently below the surface.
• Consequence: demat account naming differs. For a partnership firm, CDSL DP operating instructions require the account to be opened in the names of the natural persons (the partners) with the firm’s name recorded alongside; for an LLP the account is opened in the LLP’s own name. See the CDSL BO reference Sections 9.3 and 9.6.
• The trading account, ledger and UCC always sit on the entity’s PAN. Firm PAN and LLP PAN both carry F as the fourth character, and the exchange client category for a partnership is 06 per the NSE and BSE client-category tables.
• Beneficial ownership threshold is 10 per cent of capital or profits. The PML (Maintenance of Records) Amendment Rules 2023 (effective 7 March 2023) lowered the partnership-firm threshold from 15 per cent to 10 per cent and the company threshold from 25 per cent to 10 per cent.
• Documents come from the non-individual annexure of the Master Circular on KYC norms (12 October 2023): registration certificate, deed or LLP agreement, PAN, authorised-signatory list, and the officially valid documents of the persons authorised to transact.
• CKYC constitution types differ. Partnership firm is 02 and LLP is 09 in the CKYC legal-entity template; they are not interchangeable even though the exchange may map both to the same client category.

Conceptual overview

Under the Indian Partnership Act 1932 a firm is a compendious name for the persons who have agreed to share the profits of a business. It owns nothing in its own right: the partners own the assets jointly, and the firm’s “registration” with a Registrar of Firms is optional and confers only procedural advantages. An LLP, by contrast, is created by incorporation with the Ministry of Corporate Affairs, receives an LLPIN, can sue and be sued in its own name, and continues to exist when partners change.

For a broker the practical fallout is narrow but sharp. Everything that keys on PAN — the trading account, the client ledger, the exchange UCC record, the KRA and CKYC records, contract notes, tax reporting — works identically for both, on the entity’s PAN. Everything that keys on legal ownership of securities diverges: securities of a partnership firm cannot be registered in the firm’s name because the firm is not a person capable of holding title, so the depository account is opened in the names of the partners with the firm name recorded, while an LLP holds securities in its own name like any body corporate.

The second axis of difference is the authority document. A partnership’s authority to open and operate a broking account comes from the partnership deed plus a partners’ authority letter or resolution signed by all partners; there is no public register to verify it against. An LLP’s authority comes from the LLP agreement plus a resolution of the designated partners, and the designated partners themselves are verifiable on the MCA portal against the LLPIN and DPIN. That verifiability is the single biggest reason LLP onboarding is operationally cheaper than partnership onboarding even though the document count looks similar.

1. Regulatory framework

• SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 (12 October 2023) — Master Circular on KYC norms for the securities market; non-individual annexure specifies the document set for partnership firms and for other non-individual constitutions, and requires the officially valid documents of persons authorised to transact on behalf of the entity.
• SEBI/HO/MIRSD/SECFATF/P/CIR/2024/78 (June 2024) — AML/CFT Master Circular: customer due diligence, identification of beneficial owners, and the requirement to identify the natural person exercising ultimate effective control where no owner crosses the threshold.
• Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2023 — beneficial-owner threshold for partnership firms reduced to 10 per cent of capital or profits; beneficial ownership to be determined at the commencement of the relationship.
• SEBI/HO/MIRSD/SECFATF/P/CIR/2024/79 — KRA upload of KYC records to the Central KYC Records Registry; non-individual records use the legal-entity template.
• Indian Partnership Act 1932 — Sections 4 and 58–59 (definition of firm; optional registration with the Registrar of Firms).
• Limited Liability Partnership Act 2008 — Section 3 (LLP is a body corporate with perpetual succession), Section 7 (designated partners and DPIN), Sections 34–35 (annual Statement of Account and Solvency in Form 8, Annual Return in Form 11).
• CDSL and NSDL DP operating instructions — the account-opening instruction that for firms, associations of persons, partnership firms and unregistered trusts the account is opened in the names of the natural persons with the entity’s name recorded above. Depository field detail sits on the CDSL and NSDL pages.

2. Eligibility and preconditions

Precondition	Partnership firm	LLP
Entity PAN	Firm PAN, 4th character F	LLP PAN, 4th character F
Public registration identifier	Registration number with Registrar of Firms — only if registered	LLPIN from MCA — always present
Constitutive document	Partnership deed (and supplementary deeds)	LLP agreement filed in Form 3
Authority to open the account	Authority letter or resolution signed by all partners	Resolution of designated partners under the LLP agreement
Who may sign	Partners named in the authority letter	Designated partners or persons they authorise
Demat account name	Names of authorised partners as holders, firm name recorded	LLP’s own name
Minimum participants	Two partners	Two partners, of whom at least two designated partners, at least one resident in India
Annual filings to expect	Income-tax return; Registrar of Firms filings where registered	MCA Form 8 and Form 11
Nomination	Not applicable — non-individual	Not applicable — non-individual
BSDA	Not available	Not available

Decide the demat naming convention before you build the form

The single most expensive mistake in partnership onboarding is building one non-individual demat flow and pointing both constitution types at it. A partnership firm’s depository account carries partner names as holders; an LLP’s carries the LLP name as sole holder. If the form collects only an entity name, every partnership BO setup will be rejected at the depository and every rejection will require a fresh signed form from all partners, because the holder names are on the signed document. Branch the flow at the constitution-type selection, not at review.

3. Documents

Document	Partnership firm	LLP	Purpose
Entity PAN card	Required	Required	Client identity, exchange and KRA validation
Registration certificate	If registered under the Partnership Act	Certificate of Incorporation with LLPIN	Existence of the entity
Constitutive document	Partnership deed, plus every supplementary deed changing partners or shares	LLP agreement and any amendment	Who the partners are and their profit shares
Authority document	Authority letter or partners’ resolution naming authorised signatories and the mode of operation	Resolution of designated partners	Who may open, operate, sign and pledge
Officially valid documents of signatories	For each authorised signatory	For each authorised signatory	Identity and address of the persons transacting
Partner list with PANs and profit shares	All partners	All partners, with DPIN for designated partners	Beneficial-owner determination at 10 per cent
Beneficial-owner declaration	Required	Required	Natural persons owning or controlling more than 10 per cent
Entity bank proof	Firm account	LLP account	Third-party payment prevention
FATCA / CRS entity self-certification	Required	Required	Entity classification and controlling persons
Latest financials or ITR	For derivatives activation and risk categorisation	Same	Income-proof requirement for derivative segments
Board-equivalent GST or business proof	Optional supporting	Optional supporting	Address and activity corroboration

4. Authorised signatories and mode of operation

The operating mandate is a structured field, not free text, because every downstream system needs it as a code. The depository carries it as an operating-instruction code; the broker’s order-management and risk layers need it to decide whether a single eSign is sufficient.

Mandate	Meaning	Typical use
Singly	Any one named signatory may act alone	Small firms with a managing partner
Jointly — any two	Any two of the named signatories together	Most professional firms
Jointly — all	Every named signatory must sign	Firms with disputed control or external investors
Either or survivor	Not applicable to entity accounts	—

Practical consequences of a joint mandate that teams routinely miss: the eSign workflow must be multi-signatory and sequential or parallel by design; the DDPI or demat debit authorisation needs the same number of signatures as the account-opening form; and any running-account settlement authorisation, segment-addition request or closure request inherits the same mandate. The eSign integration covers the multi-signatory mechanics.

5. Beneficial ownership and UBO determination

For both constitution types, the beneficial owner is determined by a cascade rather than a single test:

1. Ownership or entitlement test. Any natural person who, whether acting alone or together, has ownership of or entitlement to more than 10 per cent of the capital or profits of the firm or LLP. The threshold was lowered from 15 per cent to 10 per cent by the PML (Maintenance of Records) Amendment Rules 2023.
2. Control test. Where no natural person is identified by the ownership test — for example where partners are themselves companies or trusts — the natural person exercising control through other means is identified, which requires tracing the chain of ownership upward.
3. Senior managing official fallback. Where no natural person is identified under either test, the natural person holding the position of senior managing official is recorded as the beneficial owner, with the reason documented.

Each identified beneficial owner needs full individual KYC — name, PAN, date of birth, address, photograph and signature — and must be screened against sanctions and PEP lists in the same way as a primary holder. The screening mechanics are covered on the AML screening page.

A partnership whose partners are themselves LLPs or companies is the case that breaks naive implementations: the UBO table needs to model a chain, not a flat list, because the 10 per cent test applies to effective rather than direct holding.

6. Field deltas at each destination system

Field	Type	Length	Mandatory	Source system	Destination systems	Notes
Client category	N	2	Yes	Onboarding form	NSE UCC, BSE UCC	06 Partnership Firm; LLP mapping is broker-configured, commonly 06 or 07 Body Corporate [industry practice — unverified]
Entity PAN	AN	10	Yes	Onboarding form	KRA, CKYC, UCC, BO, back-office	4th character F for both
CKYC constitution type	N	2	Yes	Derived	CKYC	02 partnership firm, 09 LLP
Registration number	AN	20	Conditional	Registration certificate	CDSL partnership_registration_no, CKYC	Only if registered under the Partnership Act
LLPIN	AN	8	Yes for LLP	Certificate of Incorporation	CKYC, UCC entity block	MCA identifier; verify on the MCA portal
Date of formation / incorporation	Date	10	Yes	Deed or CoI	UCC, CKYC, BO	UCC requires date of incorporation for body-corporate categories
Authorised partner count	N	2	Yes	Authority letter	CDSL authorized_partner_count	Drives the repeating partner block
Partner name (repeating)	AN	100	Yes	Deed	CDSL partner_N_name, UCC partner block	One row per partner
Partner PAN (repeating)	AN	10	Yes	Deed	CDSL partner_N_pan, UCC partner block	Each passes PAN validation
DPIN (repeating)	AN	8	Yes for LLP designated partners	MCA	CKYC related-person block	LLP only
Profit share percentage	N	5,2	Yes	Deed	Broker CDD, UBO computation	Not carried by exchange or depository; drives the 10 per cent test
Operating instruction	AN	2	Yes	Authority letter	CDSL operating_instruction	SI singly, JO jointly
Demat holder names	AN	100 each	Yes for partnership	Authority letter	CDSL / NSDL BO holder lines	Partnership: partner names as holders. LLP: LLP name as sole holder
Trading account type	AN	10	Yes	Derived	KRA Part II	Entity type value
FATCA entity classification	AN	—	Yes	Declarations	KRA, FATCA/CRS reporting	ACTIVE_NFFE, PASSIVE_NFFE or FINANCIAL_INSTITUTION
Beneficial owner block (repeating)	—	—	Yes	UBO declaration	CKYC related-person, broker CDD, AML screening	Name, PAN, DOB, address, photo, signature per UBO
LEI	AN	20	Conditional	Client	CDSL / NSDL BO	Required where large-value transaction thresholds apply — see Company

Generic per-field provenance is in the field atlas; the demat-account section is at H — demat account.

7. Journey deltas versus the resident-individual flow

Stage	What changes
Entry	Constitution-type selector before anything else: partnership firm or LLP. This choice branches the demat naming, the signatory model and the CKYC template
Identity	Entity PAN validated first; then a repeating signatory block, each signatory fetched from the KRA on their individual PAN where a record exists
Documents	Deed or LLP agreement, authority letter, partner list — uploaded, not DigiLocker-fetched. DigiLocker serves individual documents of signatories only
Address	Registered office or principal place of business, corroborated by registration certificate, GST registration or utility bill in the entity’s name
Bank	Entity-name account; penny-drop name match against entity PAN name
Nominations	Screen suppressed
Declarations	Entity FATCA/CRS classification, controlling-person declarations, UBO declaration, PEP screening of every partner and UBO
Review and eSign	Multi-signatory eSign matching the operating mandate; signing capacity recorded per signatory
Activation	Exchange UCC upload with the repeating partner block; BO setup with the correct holder names; KRA and CKYC non-individual upload

An extra internal step appears between eSign and UCC upload: verification of the authority document against the deed. There is no API for this — the deed’s clause on who may bind the firm has to be read against the authority letter. Budget maker-checker time for it; see the admin workflow.

8. Alternatives

Option	Strength	Weakness	Typical adopter
Partnership firm account	Cheapest entity to form; deed is fully private	Demat in partners’ names complicates transfers on partner exit; no perpetual succession; every partner change is a document event	Small family businesses and professional firms trading treasury surplus
LLP account	Separate legal person, demat in own name, partners verifiable on MCA, partner changes do not disturb title	MCA filings, LLPIN maintenance, higher formation cost	Advisory and professional firms, and small fund-adjacent vehicles
Private limited company	Strongest asset-holding vehicle, LEI-ready, SBO register gives a defensible ownership record	Board resolutions for every change, statutory audit, highest cost — see Company	Family offices and corporate treasuries
HUF	Separate tax person with a single signatory	Only for coparcenary capital; no chosen membership — see HUF	Families with pooled ancestral capital
Individual accounts of partners	No entity documentation at all	Profits and tax sit with the individual; no firm-level book	Two-partner firms that do not need an entity-level ledger

Practical notes

• [gotcha] An unregistered partnership firm is a perfectly valid client — registration under the Partnership Act is optional. Rejecting an application for want of a Registrar of Firms certificate is a self-inflicted conversion loss; the deed plus the firm’s PAN is the substantive evidence. [industry practice]
• [gotcha] Supplementary deeds matter more than the original. A firm formed in 2011 with a partner added in 2019 and another retired in 2023 has three instruments, and only the latest tells you who can sign today. Capture the complete deed chain and date-order it in the CDD file.
• [gotcha] Both firm PAN and LLP PAN have F as the fourth character, so PAN alone cannot distinguish the two. Drive the branch off the constitution-type field and the presence of an LLPIN, never off PAN parsing.
• [risk trade-off] For a partnership, opening the demat with a minimal set of holders (typically two authorised partners) reduces form-signature overhead, but every subsequent change in those partners requires a holder change at the depository, which is heavier than an authority-letter update. Firms with stable senior partners should use them as holders; firms with churn should consider converting to an LLP.
• [industry practice] Brokers commonly cap the number of partner rows accepted through the digital flow (often at ten) and route larger firms to an assisted path, because the UCC and depository repeating blocks and the UBO screening fan out quickly. [industry practice — unverified]
• [cost optimization] Verify LLPIN, DPIN and designated-partner names against the MCA master data before collecting documents. A mismatch found at that point costs one API call; found after eSign it costs a fresh multi-signatory execution.
• [gotcha] Where a partner is itself a company or LLP, the 10 per cent beneficial-ownership test applies to effective holding through the chain, not to the direct partner. Model UBO as a graph with effective-percentage computation, not as a flat table.
• [industry practice — unverified] Some depository participants decline partnership demat accounts entirely and serve such clients only through an LLP or company structure, on the view that partner-name holdings create title risk on partner exit. Confirm the DP’s stance before promising the client a firm-level demat.

Cross-references

• Non-individual entities appendix — the planning-stage summary of entity types and vendor touchpoints that this page expands.
• CKYC integration — constitution types 02 and 09, legal-entity template and non-individual upload endpoint.
• KRA integration — Section 7 non-individual fields, entity FATCA classification and GIIN handling.
• CDSL BO account reference — Sections 9.3 and 9.6, partnership and LLP account fields and the operating-instruction code.
• NSE UCC integration — client category 06, partner block and non-individual mandatory-field matrix.
• AML screening — UBO and signatory screening, PEP and sanctions matching.
• eSign integration — multi-signatory execution for joint mandates.
• Company — the LEI, SBO and board-resolution machinery that an LLP’s larger sibling carries.
• Trust, society and AOP — the other constitution types that share the “account in the names of natural persons” rule.

Verified through

2026-09-11

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AI-generated and not legal, financial, or compliance advice. See the project README for full disclaimer.