{"id":90665,"date":"2026-06-08T15:34:25","date_gmt":"2026-06-08T10:04:25","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=90665"},"modified":"2026-06-08T15:34:29","modified_gmt":"2026-06-08T10:04:29","slug":"can-ca-cs-law-firms-or-consultants-become-merchant-bankers","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/can-ca-cs-law-firms-or-consultants-become-merchant-bankers\/","title":{"rendered":"Can CA, CS, Law Firms or Consultants Become Merchant Bankers? A Simple Regulatory Guide\u00a0"},"content":{"rendered":"<p>CA, CS, law firms, and consulting firms are not limited to&nbsp;compliance&nbsp;work only. They are now also involved in major financial work, such as IPO, fundraising, restructuring, and valuation. Many firms are already&nbsp;providing&nbsp;capital <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a>-related advice to clients. So, a question arises: can these firms themselves become merchant bankers?&nbsp;<\/p>\n\n\n\n<p>In short, structure is more important here than profession. So, you&nbsp;don&rsquo;t&nbsp;have to be a CA or a lawyer.&nbsp;You have to follow the legal structure properly.&nbsp;SEBI regulates this whole thing.&nbsp;<\/p>\n\n\n\n<p>SEBI ensures that the market is safe, investors are protected, and companies give proper disclosure. So being a merchant banker means a proper legal setup, and&nbsp;maintaining&nbsp;compliance is&nbsp;very important.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a Merchant Banker?&nbsp;<\/h2>\n\n\n\n<p>Merchant bankers help companies raise funds in the capital market. They do many important things, from launching&nbsp;IPOs to handling restructuring. Their work is&nbsp;very sensitive. So, they are strictly regulated by SEBI.&nbsp;<\/p>\n\n\n\n<p><strong>The key services are:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>IPO (Initial Public Offering) management&nbsp;<\/li>\n\n\n\n<li>QIP (Qualified Institutional Placement) handling&nbsp;<\/li>\n\n\n\n<li>Open offer, buyback process management&nbsp;<\/li>\n\n\n\n<li>Company valuation&nbsp;<\/li>\n\n\n\n<li>Support in corporate restructuring&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>A merchant banker acts as a bridge between investors and companies. If there is a mistake, the investor may suffer a loss. Therefore, following SEBI rules is&nbsp;very important.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What&nbsp;Does&nbsp;SEBI Actually Require?&nbsp;&nbsp;<\/h2>\n\n\n\n<p>SEBI has given clear rules for&nbsp;<strong><a href=\"https:\/\/enterslice.com\/merchant-bankers-license-in-india\">merchant banker registration<\/a><\/strong>. If you do not follow these, you will not get a license. SEBI gives a license to entities, not to individuals.&nbsp;<\/p>\n\n\n\n<p><strong>Basic requirements are:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Must be a company or LLP<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>A proprietorship or normal partnership&nbsp;is not eligible&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Fit and proper criteria<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Promoters and directors must have a clean background&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Capital requirement<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Minimum net worth must be&nbsp;maintained&nbsp;(different according to category)&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Must have qualified employees<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>People with a finance, law, or <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Accounting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Accounting is the language of business, serving as the backbone of financial management and decision-making. It involves the systematic recording, analysis, and reporting of financial(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/accounting\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>accounting<\/a> background will be&nbsp;required&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>NISM certification will be&nbsp;required<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>A specific exam must be cleared&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Must have a compliance officer<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The compliance officer will ensure that SEBI rules are being followed properly.&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Must have infrastructure<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Office, system, and record-keeping must all be proper&nbsp;<\/p>\n\n\n\n<p><strong>Most importantly:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>SEBI does not give a license based on your degree.&nbsp;<\/li>\n\n\n\n<li>SEBI sees whether your entity is ready to take full responsibility.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Why Can&rsquo;t CA, CS, and Law Firms Apply Directly?&nbsp;<\/h2>\n\n\n\n<p>Many people think a CA firm or law firm can apply directly.&nbsp;But actually, the&nbsp;problem is the structure.&nbsp;<\/p>\n\n\n\n<p><strong>The basics of the legal form problem:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Proprietorship firm&nbsp;<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>It is run in the name of an individual&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>No separate legal identity<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Traditional partnership&nbsp;firms do not have a separate legal identity and are not considered eligible body corporates for this purpose&nbsp;<\/p>\n\n\n\n<p>It is also not a body corporate; SEBI does not consider it eligible.&nbsp;<\/p>\n\n\n\n<p><strong>Reasons for Rejection<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>SEBI only allows &ldquo;body corporate&rdquo; entities&nbsp;<\/li>\n\n\n\n<li>It must be a company or LLP&nbsp;<\/li>\n\n\n\n<li>SEBI regulates entities, not individual or firm names&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Key takeaway:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Your skills are valid&nbsp;<\/li>\n\n\n\n<li>Your experience is valuable&nbsp;&nbsp;<\/li>\n\n\n\n<li>But you must change the structure&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>It means being a CA, CS, or lawyer is not enough.&nbsp;You have to create a proper company or LLP.&nbsp;It will apply&nbsp;for merchant&nbsp;banker&nbsp;registration. This is a practical and safe route.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Right Structure: How Can Professional Firms Apply?&nbsp;&nbsp;<\/h2>\n\n\n\n<p>A CA, CS, law firm, or consultancy can become a merchant banker, but not directly. They&nbsp;have to&nbsp;follow a proper structure. The most practical way is to create a separate entity.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Creating a Separate Company or LLP&nbsp;<\/h3>\n\n\n\n<p>The easiest and safest route is to create a new company or LLP. This new entity will apply to SEBI for a merchant banker license. The old CA firm or law firm can remain separate. It will continue its own work, such as&nbsp;audit, taxes, legal advice, etc.&nbsp;<\/p>\n\n\n\n<p>The new entity must have some important things:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Its own board or partners&nbsp;<\/li>\n\n\n\n<li>proper capital&nbsp;<\/li>\n\n\n\n<li>qualified employees&nbsp;<\/li>\n\n\n\n<li>compliance system&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>This entity will officially be a merchant banker. Many people think that everything can be done with the same firm, but that is not possible. SEBI has clearly said that a separate structured entity is&nbsp;required.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Role Division Between Entities&nbsp;<\/h3>\n\n\n\n<p>Here, the roles need to be clearly divided. Otherwise, there may be problems in the future.&nbsp;<\/p>\n\n\n\n<p><strong>A merchant banker entity will do the following:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>IPO management&nbsp;<\/li>\n\n\n\n<li>Due diligence&nbsp;<\/li>\n\n\n\n<li>Offer document handling&nbsp;<\/li>\n\n\n\n<li>Direct communication with SEBI&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>These are core-regulated tasks. These cannot be given to anyone else.&nbsp;<\/p>\n\n\n\n<p><strong>A professional firm will do the following:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Tax advisory&nbsp;<\/li>\n\n\n\n<li>Legal drafting&nbsp;<\/li>\n\n\n\n<li>Accounting support&nbsp;<\/li>\n\n\n\n<li>Valuation support&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>These can be done as support services.&nbsp;<\/p>\n\n\n\n<p><strong>The most important rule:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Core merchant banking tasks cannot be outsourced.&nbsp;<\/li>\n\n\n\n<li>The merchant banker&nbsp;should not remain only a name while another firm performs the core work.&nbsp;&nbsp;<\/li>\n\n\n\n<li>SEBI wants the registered entity to take full responsibility for itself.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Capital Requirements-&nbsp;The Biggest Challenge&nbsp;<\/h2>\n\n\n\n<p>The biggest challenge of becoming a merchant banker is the capital requirement. Many firms get stuck here.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Category I merchant banker:&nbsp;<\/h3>\n\n\n\n<ul>\n<li><strong>Net worth:&nbsp;<\/strong>&#8377;50 crore&nbsp;<\/li>\n\n\n\n<li><strong>Liquid net worth:<\/strong>&nbsp;&#8377;12.5 crore&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Category II merchant banker:&nbsp;<\/h3>\n\n\n\n<ul>\n<li><strong>Net worth:&nbsp;<\/strong>&#8377;10 crore&nbsp;<\/li>\n\n\n\n<li><strong>Liquid net worth:&nbsp;<\/strong>&#8377;2.5 crore&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What does liquid net worth mean?&nbsp;<\/h2>\n\n\n\n<p>It is money or assets that can be converted into cash very easily.&nbsp;<\/p>\n\n\n\n<p>For example:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Cash&nbsp;<\/li>\n\n\n\n<li>Bank balance&nbsp;<\/li>\n\n\n\n<li>Liquid investments&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Why does SEBI want this?&nbsp;<\/h2>\n\n\n\n<p>A merchant banker has to take a lot of financial responsibility.&nbsp;Funds should be ready in a sudden situation. It is not easy to arrange this amount for a small or mid-size CA, CS, or consulting firm. So many firms:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Tie-up with existing merchant bankers&nbsp;<\/li>\n\n\n\n<li>Do JV (joint venture)&nbsp;<\/li>\n\n\n\n<li>Or stay at the advisory level&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Category I vs Category II Merchant Bankers<\/strong>&nbsp;<\/h2>\n\n\n\n<p>SEBI has now divided merchant bankers into two categories-&nbsp;Category I and Category II.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Category I&nbsp;Merchant Banker&nbsp;<\/h3>\n\n\n\n<p>Category I&nbsp;is&nbsp;a full-service merchant banker. They can do all kinds of work:&nbsp;<\/p>\n\n\n\n<ul>\n<li>IPO (main board)&nbsp;<\/li>\n\n\n\n<li>Fundraising&nbsp;<\/li>\n\n\n\n<li>Issue management&nbsp;<\/li>\n\n\n\n<li>Corporate advisory&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>If a firm wants to handle a main board IPO, then Category I is mandatory. But the problem is that the capital requirement is&nbsp;very high. So, it is&nbsp;generally possible&nbsp;only for big firms or those with strong financial backing.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Category II&nbsp;Merchant Banker&nbsp;<\/h3>\n\n\n\n<p>Category II is a bit limited in scope.&nbsp;They can do:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Open offers&nbsp;<\/li>\n\n\n\n<li>Buybacks&nbsp;<\/li>\n\n\n\n<li>Delisting&nbsp;<\/li>\n\n\n\n<li>Advisory services&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Category II merchant bankers cannot handle public issues of equity shares proposed to be listed on the main board of a recognized stock exchange. This category is a better&nbsp;option&nbsp;for small firms or advisory-focused firms. The capital requirement is low, and the risk is also relatively low. Many firms start with Category II first and then consider Category I as they&nbsp;grow.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Can Individuals Apply?&nbsp;<\/h2>\n\n\n\n<p>No, individuals cannot apply. SEBI grants merchant banker licenses only to companies or LLPs. But individuals are not completely out. They can play&nbsp;an important role.&nbsp;<\/p>\n\n\n\n<p><strong>What can an individual do?<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Can be a director&nbsp;<\/li>\n\n\n\n<li>Can be an&nbsp;employee&nbsp;<\/li>\n\n\n\n<li>Can be a&nbsp;promoter&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Key roles:<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>Principal Officer:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>This person handles daily operations.&nbsp;<\/li>\n\n\n\n<li>A&nbsp;Minimum of 5 years of financial market experience is&nbsp;required.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Compliance Officer:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Will see if SEBI rules are being followed.&nbsp;<\/li>\n\n\n\n<li>This role must be independent.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Key SEBI Requirements Checklist&nbsp;<\/h2>\n\n\n\n<p>Before applying for a merchant banker&nbsp;registration, keep this checklist in mind:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Company or LLP structure<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Must have a proper legal entity&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Minimum net worth<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Must&nbsp;maintain&nbsp;capital as per category&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Certified employees<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>NISM certification&nbsp;required&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Independent compliance officer<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Must be a separate role, conflict-free&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Principal officer<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Must have experience (minimum 5 years)&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Office infrastructure<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Must have a proper office, IT system,&nbsp;and&nbsp;data management&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Record-keeping system<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>All transactions must be properly maintained&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Policies and controls<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Conflict of interest policy&nbsp;<\/p>\n\n\n\n<p>Outsourcing policy&nbsp;<\/p>\n\n\n\n<p>Risk management&nbsp;policy&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Client grievance system<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Must have a system to handle client complaints&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Fit and proper criteria<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Promoters must have a clean background&nbsp;<\/p>\n\n\n\n<p>These are basic requirements, but practical implementation is&nbsp;the&nbsp;real challenge.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Structuring Models for Professional Firms&nbsp;<\/h2>\n\n\n\n<p>Professional firms follow three models when entering merchant banking. It depends on capital, risk, and long-term plans.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Separate Merchant Banking Entity<\/h3>\n\n\n\n<p>This is the most common and safest model. Here, the firm creates a new company or LLP, which applies&nbsp;for merchant banker registration. This structure is clean because the roles are clearly divided.&nbsp;<\/p>\n\n\n\n<p><strong>Key Points:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>New entity = merchant banker&nbsp;<\/li>\n\n\n\n<li>Old firm = advisory\/support role&nbsp;<\/li>\n\n\n\n<li>SEBI compliance is easier&nbsp;<\/li>\n\n\n\n<li>Easier to manage conflict&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The merchant banker entity must be real. It is not enough to create a company just for the sake of a name. A proper team, system, and capital must be there. SEBI will not approve.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Joint Venture Model<\/h3>\n\n\n\n<p>The firm partners with an already registered&nbsp;merchant&nbsp;banker&nbsp;or investor. Capital and experience can be shared.&nbsp;<\/p>\n\n\n\n<p><strong>Key points:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Tie-up with existing merchant banker&nbsp;<\/li>\n\n\n\n<li>Capital burden reduced&nbsp;<\/li>\n\n\n\n<li>Faster entry possible&nbsp;<\/li>\n\n\n\n<li>Expertise&nbsp;combined&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>But there are downsides too.&nbsp;Control has to be shared; profit has to be shared.&nbsp;If the agreement is not clear, there can be conflict in the future.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Advisory-Only Model<\/h3>\n\n\n\n<p>In this model, the firm does not&nbsp;take&nbsp;a license. It only works as an advisor.&nbsp;<\/p>\n\n\n\n<p><strong>Key points:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>No SEBI license needed&nbsp;<\/li>\n\n\n\n<li>Work with a registered merchant banker&nbsp;<\/li>\n\n\n\n<li>Low risk&nbsp;<\/li>\n\n\n\n<li>No capital requirement&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>But there are limitations. You cannot lead the deal. Many firms start with this model first and later take a license when they grow.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Risks and Practical Challenges&nbsp;<\/h2>\n\n\n\n<p>Although merchant banking is attractive, the challenges are no less. The key risks are:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Capital lock-in<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>A large amount of investment is&nbsp;required&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Compliance burden<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Regular filings, audits, and monitoring&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>SEBI inspections<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Sometimes inspections may be&nbsp;required&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Conflict of interest<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Tough to handle conflict if you have group firms&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Talent hiring challenges<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Not easy to find experienced people&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Reputation risk<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Even a small mistake can become a big issue&nbsp;<\/p>\n\n\n\n<p>You should clearly understand the risks before entering this sector.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Revenue and Long-Term Viability&nbsp;<\/h3>\n\n\n\n<p>Becoming a merchant banker is not just about getting a license. Sustaining it long-term is equally important. SEBI has set some minimum revenue expectations.&nbsp;<\/p>\n\n\n\n<p><strong>Minimum Revenue Requirement&nbsp;<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Category I &rarr;&nbsp;At least&nbsp;&#8377;25 crore&nbsp;<\/li>\n\n\n\n<li>Category II &rarr;&nbsp;At least&nbsp;&#8377;5&nbsp;crore&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>This revenue&nbsp;must be generated on a cumulative <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a> over the three&nbsp;immediately&nbsp;preceding&nbsp;financial years.&nbsp;&nbsp;<\/p>\n\n\n\n<p><strong>Important points:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Strong deal pipeline&nbsp;required&nbsp;<\/li>\n\n\n\n<li>Regular transactions&nbsp;required&nbsp;<\/li>\n\n\n\n<li>Only occasional deals will not do&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Many firms become inactive after getting a license. SEBI now wants to ensure that only serious players are in the market. So, it is necessary to have a clear business plan before applying.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How does Enterslice help&nbsp;Companies stay&nbsp;Compliant?&nbsp;<\/h2>\n\n\n\n<p>The merchant banker registration process is complex. Here, Enterslice can&nbsp;provide&nbsp;end-to-end support.&nbsp;<\/p>\n\n\n\n<p><strong>Our services:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Feasibility analysis<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Checking whether your firm is ready&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Entity structuring<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Company or LLP setup planning&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Capital planning<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Net worth requirement planning&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Documentation support<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Preparing SEBI application documents&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>SEBI application filing<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Ensuring proper submission&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Policy drafting<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Compliance, conflict, and outsourcing policies&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Post-registration compliance<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Ongoing filings, updates, and monitoring&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Related registrations<\/strong>&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>PMS, AIF, advisory license support&nbsp;<\/p>\n\n\n\n<p>So, Enterslice is a one-stop solution. The guidance is&nbsp;very helpful&nbsp;for those coming to merchant banking for the first time.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion&nbsp;<\/h2>\n\n\n\n<p>A CA, CS, law firm, or consultancy cannot directly become a merchant banker.&nbsp;This requires a proper company or LLP structure.&nbsp;<\/p>\n\n\n\n<p>Skill is important here, but structure is more important. If you do not plan properly, your application may be rejected, or compliance issues may arise later.&nbsp;<\/p>\n\n\n\n<p>So, it is better to take a structured approach from the beginning.&nbsp;<strong><a href=\"https:\/\/enterslice.com\/\">Enterslice<\/a><\/strong>&nbsp;can&nbsp;guide you here. If you have proper guidance, the process becomes much smoother. We&nbsp;guide you&nbsp;from planning to registration. Contact us today for better, hassle-free&nbsp;compliance.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FAQs Related To&nbsp;CA, CS, Law Firms or Consultants Become Merchant Bankers<\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3>Can a CA firm apply directly for a merchant banker license?<\/h3><p class=\"saswp-faq-answer-text\">No, a CA firm cannot apply directly for a merchant banker license if it is a proprietorship or traditional partnership. Because such a firm is not a &ldquo;body corporate,&rdquo; SEBI only licenses companies or LLPs. However, if the partners of a CA firm want to, they can form a separate company or LLP and apply through that entity. This is a practical&nbsp;approach.&nbsp;&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>Can a law firm become a merchant banker?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">A law firm cannot become a merchant banker directly if it is in a traditional partnership structure. However, the partners of a law firm can form a separate company or LLP and apply for a merchant banker license. Lawyers need to follow the Bar Council rules. So, creating a separate entity is the safer&nbsp;option.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>Is LLP eligible for merchant&nbsp;banker&nbsp;registration?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">Yes, LLP (Limited Liability Partnership) is eligible for merchant banker registration.&nbsp;However, all conditions have to be fulfilled.&nbsp;For example, minimum capital, qualified employees, a compliance officer, a proper system, etc.&nbsp;It is not enough to form an LLP; all SEBI requirements must also be met. Many professional firms choose the LLP route because it provides a flexible structure.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>Can an individual get a&nbsp;merchant&nbsp;banker license?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">No, an individual cannot get a&nbsp;merchant&nbsp;banker license in his own name. SEBI only gives licenses to companies or LLPs. However, an individual is not completely out. He can work as a director, employee, or promoter. Many times, experienced professionals take on the role of principal officer or compliance officer. So, indirect individual involvement is possible, but not direct licensing.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>What certifications are&nbsp;required?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">Some employees working in merchant banker entities will need NISM certification. The most common is NISM Series-IX (Merchant Banking).&nbsp;Additional&nbsp;certification is required for a compliance officer, such as NISM Series-IIIA. This certification ensures that the person understands SEBI rules. It is better to have this certification at the time of application; there may be delays.<\/p><\/li><li style=\"list-style-type: none\"><h3>What is the role of a compliance officer?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">The main job of a compliance officer is to ensure that the company is following all SEBI rules.&nbsp;<br>He&nbsp;monitors&nbsp;filings, reporting, and internal policies. This role should be independent. It cannot overlap with the principal officer.&nbsp;Basically, the&nbsp;compliance officer is the regulatory backbone of the company. This role is&nbsp;very important&nbsp;to avoid small mistakes.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>Can merchant banking work be outsourced?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">The entire work cannot be outsourced. SEBI has clearly&nbsp;stated&nbsp;that the outsourcing of core merchant banking activities is not allowed. For example, IPO management, due diligence, and offer documents. However, support services can be outsourced, such as legal drafting or accounting help. The main responsibility will always remain with the registered merchant banker.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>What is the difference between Category I and II?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">Category I&nbsp;is&nbsp;a full-service merchant banker. It has a higher capital requirement and higher risk. It can do IPO (main board) and fundraising. Category II is of limited scope. It is an easier entry point, especially for small firms. It cannot&nbsp;handle a main-board IPO&nbsp;but can&nbsp;handle&nbsp;open offers, buybacks, and advisory&nbsp;services.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>How long does SEBI registration last?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">SEBI merchant banker registration is not for any fixed&nbsp;short period.&nbsp;It is generally valid as long as the company follows the rules.&nbsp;This means there is no tension of regular renewal, but compliance&nbsp;has to&nbsp;be&nbsp;maintained. If rules are broken or there is&nbsp;a serious issue, then SEBI can suspend or cancel the license. So, it is important to get registered and&nbsp;maintain&nbsp;it.&nbsp;<\/p><\/li><\/ol><\/div>","protected":false},"excerpt":{"rendered":"<p>CA, CS, law firms, and consulting firms are not limited to&nbsp;compliance&nbsp;work only. They are now also involved in major financial work, such as IPO, fundraising, restructuring, and valuation. Many firms are already&nbsp;providing&nbsp;capital <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\" href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\" data-gt-translate-attributes=\"[{&quot;attribute&quot;:&quot;data-cmtooltip&quot;, &quot;format&quot;:&quot;html&quot;}]\">market<\/a>-related advice to clients. So, a question arises: can these firms themselves become merchant bankers?&nbsp; In short, structure is more important here than [&hellip;]<\/p>\n","protected":false},"author":56,"featured_media":90667,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1314,11337],"tags":[],"acf":{"service_id":"205"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can CA, CS, Law Firms or Consultants Become Merchant Bankers?<\/title>\n<meta name=\"description\" content=\"CA, CS, law firms, and consulting firms are not limited to compliance work only. 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They are now also involved in major financial work, such as IPO, fundraising, restructuring, and valuation.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/can-ca-cs-law-firms-or-consultants-become-merchant-bankers\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2026-06-08T10:04:25+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-06-08T10:04:29+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2026\/06\/CA-CS-Law-Firms-or-Consultants-Become-Merchant-Bankers.webp\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Margesh Rai","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2024\/03\/margesh.kumar_.rai_.png","authorDescription":"Margesh Kumar Rai is a passionate and versatile content writer with 6+ years of combined experience as a content writer and content moderator in BFSI, Fintech, Growth Advisory, Business Valuation, Debt Recovery, etc. His interest in the field of startup consulting and compliance support pulled him into the space of legal fintech research.","postViews":7,"readingTime":8,"nextPost":null,"prevPost":{"id":90660,"slug":"essential-steps-for-company-formation-in-latin-america"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2026\/06\/CA-CS-Law-Firms-or-Consultants-Become-Merchant-Bankers.webp","postTerms":"Finance &amp; Accounting","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90665"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=90665"}],"version-history":[{"count":2,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90665\/revisions"}],"predecessor-version":[{"id":90669,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90665\/revisions\/90669"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/90667"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=90665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=90665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=90665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}