Can I invest from the profits of a company to any Mutual fund - lumpsum or SIP?

A private company is allowed to invest in mutual funds, as it can effectively manage it’s working capital requirements by investing in short-term liquid funds. So that they can easily withdraw money as and when needed and also enable them to capture returns on funds lying idle. Companies can also invest in balanced or equity funds to realize long-term growth objectives. However, to begin with, any such investment company needs to adhere to the basic requirements of Companies Act, 2013.

A Board Resolution shall be passed, authorizing a director or other personnel to invest. Resolution can also suggest the limits (if any) on the investment.

KYC non-individual form shall be filled along with relevant documents.

The authorized person shall also fill the application form accompanied by relevant documents.

Mutual fund investment helps companies to gain preferential tax treatment, better returns and the flexibility to design a portfolio that best suits their needs and situations.

It is better to invest a lump-sum amount in mutual funds as generally that investment is to utilize the idle funds of the company for the short-term and the company can withdraw the total amount any time.