HNI wealth · Family Office
Single family office: when to set one up and what structure to use
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Facts
A Single Family Office (SFO) is a dedicated entity to manage one family's wealth, investments, tax, legal, philanthropy, and succession. Typically worth setting up at ₹25Cr+ of investable assets where the cost of professional management is justified.
Provisions and law
- Companies Act | IT Act | SEBI (for investment management)
Analysis
SFO structures: • Pvt Ltd holding company: Family owns shares. Company holds investments, receives dividends, earns capital gains. Tax at corporate rate (22%). Dividend distribution taxed when paid to family members. • LLP: Partners share profits. Flexible profit distribution. Income taxed in partners' hands. Good for advisory/management functions. • Trust: Discretionary trust for inter-generational wealth. Highest protection but income taxed at maximum marginal rate (without charitable purpose). • Combination: Most family offices use a holding company + trust structure, company for investments, trust for succession.
Conclusion
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