A very valuable question.
The answer to the question, "Can Partnership Firms Invest in Mutual Funds?" is an emphatic Yes. A partnership firm can invest in mutual funds, by opening a mutual fund account, as it opens and operates a bank account.
The partnership deed, the contractual instrument that brings the firm into existence, shall expressly permit such investment. The mutual fund(s) will usually demand a certified copy of the partnership deed to ensure that such investments are permitted. The deed should also mention which partner(s) are authorised to apply for make investments in mutual funds.
With respect to questions like how to invest in mutual fund, what type of mutual fund to choose, whether it is a single lump-sum or sip investment, for how long to make and keep the investment intact, fund management costs, etcetera, the firm may seek financial advice from an honest and competent person. The firm better beware that advisors are known to be good at earning fat fees for themselves rather than earn a return for the investor.
Even though a partnership firm can make investments, one should understand that a partnership firm is not a separate legal entity like a company incorporated under the company law. Therefore, the partners are technically joint owners. As long as the firm continues to exist it will hold all assets and liabilities. In the event of dissolution of the partnership firm, the assets and liabilities are either liquidated or distributed among partners, in which case the mutual fund investments may get transferred to one or more partners or sold off.
The partnership deed, the contractual instrument that brings the firm into existence, shall expressly permit such investment. The mutual fund(s) will usually demand a certified copy of the partnership deed to ensure that such investments are permitted. The deed should also mention which partner(s) are authorised to apply for make investments in mutual funds.
With respect to questions like how to invest in mutual fund, what type of mutual fund to choose, whether it is a single lump-sum or sip investment, for how long to make and keep the investment intact, fund management costs, etcetera, the firm may seek financial advice from an honest and competent person. The firm better beware that advisors are known to be good at earning fat fees for themselves rather than earn a return for the investor.
Suggested Further Reading:
- Types of Mutual Funds
- How to Choose the Right Mutual Fund to Invest?
- How Frequent Changes to Mutual Fund Portfolio Affect Investor Interest?
In conclusion, the answer to the question, "Can Partnership Firms Invest in Mutual Funds?" is a definite yes. Partnership firms can make and hold mutual fund as well as all other types of assets as well as investments.
Thank you,
With Best Regards,
Anand
superb... Even now many people don't know about the mutual fund. A mutual fund is the best choice for small investors and makes more money return. there is no any restriction in mutual funds to invest money.
ReplyDeletehow to invest in mutual funds
Financial Consultant in Chennai
Financial planners in Chennai
Investment is one of the best ways to achieve financial freedom. For a beginner there are so many challenges you face. It’s hard to know how to get started. Trading on the Cryptocurrency market has really been a life changer for me. I almost gave up on crypto currency at some point not until I got a proficient trader Bernie Doran, he gave me all the information required to succeed in trading. I made more profit than I could ever imagine. I’m not here to converse much but to share my testimony, I invested $2000.00 and got back $20,500.00 as my ROI within 7 business days of investment. His strategies and signals are prolific and accurate , I have also gained more knowledge on the trade market. If you are new to cryptocurrency I would recommend you contact him through Gmail : BERNIEDORANSIGNALS@GMAIL.COM or his WhatsApp : +1424(285)-0682 , tell him I referred you
ReplyDelete