1. Legal Recognition of the Firm’s Capacity

• A partnership firm is not a separate legal entity but acts through its partners
  
• Indian law allows firms to hold property and assets, including shares
  
• The firm can invest in shares if permitted under the partnership deed
  
• Investments must be made in the firm’s name, represented by its partners
  
• The firm must comply with rules set by stock exchanges and regulatory bodies
  

2. Role of the Partnership Deed

• The deed should mention investment or shareholding as an allowed activity
  
• If silent, all partners must agree before acquiring shares
  
• Profit or loss from shares should be addressed in the deed or by consent
  
• Restrictions or responsibilities related to investment must be recorded
  
• Clear terms reduce the risk of internal disputes among partners
  

3. Opening of Demat and Trading Account

• A firm must open a Demat and trading account in the firm’s name
  
• KYC documents of the firm and its authorized partners are required
  
• A partner is designated to operate the account on behalf of the firm
  
• SEBI and depository rules must be followed for account setup
  
• All transactions should be properly recorded and disclosed
  

4. Voting and Participation Rights

• The firm enjoys shareholder rights such as voting and attending meetings
  
• It can appoint a partner or representative to act on its behalf
  
• The firm’s representative participates in decisions as on shareholding
  
• These rights must be exercised in accordance with the firm’s interests
  
• The firm’s vote is counted like that of any other shareholder
  

5. Recordkeeping and Compliance

• The firm must maintain proper records of shareholding activities
  
• Income and gains from shares must be reflected in firm’s accounts
  
• Partner approval is needed for major share transactions
  
• Transfer or sale of shares must follow firm’s policies and legal rules
  
• Proper compliance enhances transparency and financial accuracy