Should You Register as an Individual or Set Up a Company

Should You Register as an Individual or Set Up a Company for Your IA Practice?

One of the earliest, most consequential decisions anyone entering the SEBI Investment Adviser space faces is choosing between individual and non-individual (company or LLP) registration — a choice that shapes net worth obligations, client capacity, succession planning, and the practice's long-term scalability in ways that are easy to underweight at the outset.

The Individual IA Registration Path

Registering as an individual IA is the lighter-weight entry point — lower capital commitment, simpler compliance structure, and a natural fit for a solo practitioner building a personal advisory relationship-driven practice. However, this path carries a defined cap on the number of clients an individual IA can serve directly, beyond which the individual must either bring on additional qualified persons under a more formal structure or transition to non-individual registration — meaning the individual path has a built-in scalability ceiling by design.

The Non-Individual (Company/LLP) IA Registration Path

Registering as a non-individual entity — typically a company or LLP — carries a defined net worth requirement (currently ₹50 lakh under SEBI's framework, computed as paid-up capital plus free reserves, net of specified deductions) but removes the individual client-count ceiling, allowing the practice to scale with multiple qualified advisers operating under one registration, one compliance infrastructure, and one brand.

Why the Deposit Requirement Applies to Both

Regardless of individual or non-individual registration, every IA must maintain a deposit with a scheduled bank (or in liquid/overnight mutual fund units), marked as lien in favour of IAASB — with the required deposit amount scaling based on the maximum number of clients served in the preceding financial year. This means even a solo individual IA needs to actively track client count growth and correspondingly scale the deposit, not treat it as a fixed, one-time commitment.

Succession Planning — A Genuine Practical Difference

This is a distinction that's easy to overlook at the point of initial registration but matters considerably over a practice's lifetime: an individual IA registration is tied to that specific individual — SEBI's framework specifically requires individual IAs to appoint a legal heir, executor, trustee, or estate administrator to manage transition of the advisory business in the event of the individual's death or disability, since the registration itself doesn't automatically transfer or persist independent of the individual. A non-individual (company/LLP) registration, by contrast, exists independently of any single individual's continuation in the business, allowing for more natural continuity through partner or director transitions, ownership changes, or eventual sale of the practice.

Growth and Team-Building Considerations

Solo practice, personal brand, direct client relationships, limited near-term scaling ambition → individual registration is often the simpler, lower-cost starting point.
Ambition to build a multi-adviser team, scale beyond an individual client cap, or eventually bring in partners or investors → non-individual registration provides the structural foundation this requires from the outset, avoiding a disruptive mid-practice transition later.
Uncertain which fits → many practitioners start individual and transition to non-individual registration as the practice genuinely grows — a viable path, but one that involves its own transition compliance work (new registration, updated client agreements, potential net worth infusion) worth factoring into the decision rather than assuming it's a seamless, cost-free upgrade later.

The Compliance Overhead Difference

Non-individual registration typically brings a somewhat heavier ongoing compliance overhead — board or partner-level governance documentation, potentially more detailed conflict-of-interest policies if multiple advisers operate under one registration, and the higher net worth maintenance obligation — costs worth weighing honestly against the scalability and succession benefits before committing to that structure prematurely.

Why This Matters

This isn't purely an administrative choice — it shapes how large the practice can grow without a disruptive restructuring, how the business survives beyond any single individual's involvement, and the near-term capital and compliance commitment required. Getting this decision right at the outset, based on genuine growth ambition rather than just the lowest initial barrier to entry, saves considerable disruption later.

How Anuj Desai & Associates Can Help

We help prospective IAs assess which registration structure — individual or non-individual — genuinely fits their growth ambitions and succession considerations, and support the registration process and any later transition between structures as a practice scales. If you're deciding how to structure your IA registration, we'd welcome the opportunity to help you think it through properly.

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Should You Register as an Individual or Set Up a Company for Your IA Practice?