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NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Opening

Operation of Joint, Minor, Corporate and NRI Demat Accounts

Updated 11 October 2026 · Fact-checked

These are special rules for who opens and operates a demat account when the holder is not a single adult resident. Joint accounts need every holder's details and follow the operating instruction. Minor accounts are run by a guardian. Companies need authorised signatories. NRIs need the permitted route and a linked bank account.

Understand Operation of Joint, Minor, Corporate and NRI Accounts

A demat account holds securities in electronic form. For an ordinary adult resident, one person opens it and operates it. Other holders need extra rules, because the DP must know who can give instructions and who is legally accountable.

In a joint account, up to three holders can be named. The person named first on the account opening form is the first holder. Every joint holder must complete KYC and sign the account opening form. The holders choose the operating instruction on the form, for example all holders jointly, or 'either or survivor' / 'anyone or survivor'. The instruction applies to the account as a whole. The DP acts on the operating instruction given in the form. If the form gives no operating instruction, the default is that all holders sign delivery instructions. Always read the instruction on the form first.

If a joint holder dies, the surviving holder(s) continue to hold the securities. The DP deletes the deceased joint holder's name through the transmission procedure, on receiving the death certificate and the request. The securities do not go to heirs in this case. Transmission to the nominee or legal heirs applies on the death of a sole holder, or of the last surviving holder.

A minor cannot enter into a contract. So the account is opened in the minor's name and is operated by a natural guardian or a court-appointed guardian. The minor's date of birth proof and the guardian's proof of relationship are required. A minor's account cannot be a joint account with another person. The guardian signs instructions. On attaining majority, the holder applies to change the status to individual, submitting fresh KYC and the change-of-status documents required as per the DP's procedure and the NISM workbook, and the earlier guardian's authority ends.

Non-individual holders such as companies, trusts, partnership firms and societies act through authorised persons. The DP collects the constitutional documents, a board resolution or equivalent authority, a list of authorised signatories with specimen signatures, and KYC of the signatories. An NRI can open a demat account, subject to the route under which the investment is made, and the DP must see the bank account details and the permitted route documents. Check with the NISM workbook for the exact route names.

Key formulas to remember

Joint holders
Maximum 3 holders; first holder + second + third
All joint holders must provide KYC and sign the form. Names are recorded in the order given on the account opening form. The holders choose the operating instruction on the form (all jointly, or 'either or survivor' / 'anyone or survivor'), and the DP acts on it for the account as a whole. If the form gives no operating instruction, the default is that all holders sign.
Minor account operation
Account in minor's name, operated by guardian
Guardian's proof of relationship and minor's age proof required. No joint holders with a minor account.
Minor turns major
On attaining 18 years, the holder applies to change the status to individual
The holder submits fresh KYC and the change-of-status documents required as per the DP's procedure and the NISM workbook. The guardian's authority ends.
Joint holder death
Survivors continue; deceased holder's name deleted through transmission on death certificate and request
Securities pass to the nominee or legal heirs only when no holder is left.
Non-individual holder
Constitutional documents + authority resolution + authorised signatory list
The signatories' KYC and specimen signatures are also needed.

How to solve Operation of Joint, Minor, Corporate and NRI Accounts questions

Use this method for any question on special holder accounts. First identify the type of holder. Then match the rule to that holder.

  1. 1Identify the holder type: joint, minor, company, trust, firm, society or NRI.
  2. 2Note what the question asks: opening documents, who operates, or what happens on an event such as death or reaching majority.
  3. 3Recall who must sign: all joint holders for KYC, the guardian for a minor, authorised signatories for entities.
  4. 4Match the documents: age proof for minors, constitutional documents and resolution for entities, route and bank proof for NRIs.
  5. 5Check the event rule: on the death of a joint holder the survivors continue and the deceased's name is deleted through the transmission procedure; on the death of a sole or last holder, transmission applies; a minor reaching majority applies, with fresh KYC, to change the status to individual.
  6. 6Remove options that break a core rule, such as a minor in a joint account or a guardian continuing after majority.
  7. 7Pick the option that matches the rule exactly. Do not select an option based on common practice alone.

Quickest way: Holder-to-rule matching

When to use it: Use it when the question names a holder type and asks for a single rule.

  1. Join the holder type to its key word: joint means operating instruction, minor means guardian, company means resolution, NRI means route and bank.
  2. Scan the options for that key word.
  3. Reject options with absolute words such as 'always' or 'only' unless the workbook rule is absolute.
  4. Choose the match and move on.

Common mistakes in Operation of Joint, Minor, Corporate and NRI Accounts

  • Thinking the minor can sign instructions.

    Students see the account in the minor's name.

    Fix: The name is the minor's, but the guardian operates the account.

  • Allowing a joint holder in a minor's account.

    Students treat the guardian as a joint holder.

    Fix: A guardian is not a holder. The minor is the sole holder.

  • Assuming the account continues as a minor account after the minor turns 18.

    No action is visible in the account.

    Fix: The holder must apply to change the status to individual, with fresh KYC and the change-of-status documents required as per the DP's procedure.

  • Skipping KYC for second and third joint holders.

    Students focus on the first holder.

    Fix: Every joint holder needs KYC and a signature on the form.

  • Treating a company like an individual, with one signature.

    The process feels the same as for an individual.

    Fix: A company needs a resolution naming authorised signatories and their specimen signatures.

Worked examples

Example 1

A demat account is opened in the name of a 12-year-old. Which statement is correct?
A. The minor operates the account on reaching 12 years.
B. The guardian operates the account on behalf of the minor.
C. A friend of the family may be added as a joint holder.
D. The account needs no age proof.

Show the solution
  1. The holder is a minor, so the minor cannot contract.
  2. Option A is wrong because a minor cannot operate it.
  3. Option C is wrong because a minor account has no joint holder.
  4. Option D is wrong because age proof is needed.
  5. Option B matches the rule that a guardian operates the account.

Answer: B. The guardian operates the account on behalf of the minor.

Example 2

A company wants to open a demat account. Which set of documents is the DP most likely to need?
A. Only the PAN card of one director.
B. Constitutional documents, an authorising resolution and a list of authorised signatories.
C. Only a bank statement of the company.
D. A guardian's relationship proof.

Show the solution
  1. The holder is a non-individual, so it acts through authorised persons.
  2. Option A lacks the entity's own documents.
  3. Option C is not enough to prove authority.
  4. Option D belongs to minor accounts.
  5. Option B covers entity identity, authority and signatories.

Answer: B. Constitutional documents, an authorising resolution and a list of authorised signatories.

Exam tips

  • Link each holder type to one key word and use it to filter options.
  • Watch for options that put a minor in a joint account. They are wrong.
  • Expect questions on what happens at an event: death of a holder or a minor turning 18.
  • For NRI questions, think of the permitted route and the linked bank account, and confirm specifics in the workbook.
  • Read the operating instruction wording carefully in joint account questions.

Practice questions from Functions of Depository Participant - Account Opening

Operation of Joint, Minor, Corporate and NRI Accounts in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Operation of Joint, Minor, Corporate and NRI Accounts: frequently asked questions

Who operates a minor's demat account?

The guardian operates it. The account is in the minor's name, and the guardian signs instructions. The DP needs age proof for the minor and proof of the guardian's relationship.

What happens to a joint demat account if the first holder dies?

The surviving holders continue as the account holders. The DP deletes the deceased holder's name through the transmission procedure, on receiving the death certificate and the request. The securities pass to the nominee or legal heirs only when no holder is left.

What documents does a corporate demat account need?

The DP needs the constitutional documents, a resolution authorising the account and the signatories, and a signatory list with specimen signatures. KYC of the signatories is also needed.

Can an NRI open a demat account?

Yes, subject to the permitted route and documents. The DP checks the route details and the linked bank account. Confirm the exact route rules in the NISM workbook.