The 300-client line: when an individual adviser has to become a company

Most individual Investment Advisers will never reach this threshold. The ones who do tend to reach it by accident, because the count is of agreements in force rather than of clients who are actively paying attention.

The rule

SEBI then defines the count precisely. Number of clients means client agreements in force at any point of time, and the limit of 300 is not to be exceeded on any day. There is no averaging across the year and no grace for a client who signed and went quiet. If the agreement is live, it counts.

How the transition works

• You apply for in-principle registration as a non-individual Investment Adviser, in Form A, with the applicable fee.
• In-principle registration is valid for up to three months. The transition has to complete inside that window.
• You keep servicing your existing clients throughout the transition.
• On completing it, you surrender the individual certificate and receive final registration as a non-individual adviser.
• You may keep your old registration number if you want to.

If the transition does not happen

SEBI covers this case rather than leaving it as a breach. If the adviser does not get non-individual registration, they continue as an individual adviser and must stay inside the client and fee limits. In other words, you shed clients back below 300. That is a worse outcome than planning the corporatisation, which is the point of watching the number before it arrives.

What corporatising actually pulls in

The threshold is written as a client count, but crossing it changes the shape of the practice. A non-individual adviser designates a principal officer, appoints a compliance officer, and can appoint an independent professional who is a member of ICAI, ICSI or ICMAI as that compliance officer, provided they hold the relevant NISM certifications. A non-individual adviser that also does distribution has to run advisory through a separately identifiable department or division, keep an arm's-length relationship, and maintain client-level segregation at group level, meaning the same client cannot be an advisory client and a distribution client anywhere in the group.

There was also a hard deadline attached to a related problem. A partnership firm registered as an adviser where no partner met the qualification and certification requirements had to re-register as an LLP or a body corporate by 30 September 2025.

Watch the number while it is still climbing

Three hundred agreements and ₹3 crore of fees are the two triggers, whichever comes first. The deposit slabs move at 150, 300 and 1,000 clients, so an adviser near 300 is stepping across two thresholds at once: the deposit goes from ₹2 lakh to ₹5 lakh in the same neighbourhood where corporatisation becomes compulsory. Both are cheaper to plan for in the quarter before than the week after.