alleryStart learning →The legal form under which a mutual fund is set up in India is a
ATrust
BPartnership firm
CCompany
DCooperative society
Answer & Solution
Correct answer: A. Trust
1. SEBI (MF) Regulations, 1996 define a mutual fund as a fund established in the form of a trust.
2. The trust raises money by selling units to the public under one or more schemes.
3. The pooled money is invested in securities in line with a stated objective.
4. A partnership firm, company or cooperative society are not permitted legal forms for an Indian mutual fund.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 2 "Concept and Role of a Mutual Fund", §2.1_
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