What Are The Different Types Of Business Partners?

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A business partner is a legal entity that collaborates with several stock brokers to enable the purchase and sale of stocks on behalf of its clients. Different business models are used by business partners. These business models define the many different types of business partners. A business partner is a wise first step for anyone wishing to enter the world of stock trading. But what kind of business partner should you become? 

Individuals interested in becoming a business partner should first understand what are the different types of business partners and where their abilities match best. And, no, it isn’t necessarily about where you make the most money.

Types Of Business Partners

  • Master Franchise

The Master Franchise was the earliest and arguably most popular kind of sub-broking in India. The stockbroking house offers a turnover of all dictates over franchising operations within a certain region, territory, or district under this type of business partner. As a consequence, franchise outlets operating within the defined region or district are subject to the master franchise. 

As a franchise fee, the master franchise will get a set proportion. This charge is determined at the start of the franchise when both the owner of the franchise and the master franchise accept the franchising contract.

A royalty will also be paid to the master franchise. The royalty payment is a proportion of the total income generated during a given time period. The royalty amount varies from company to business and is determined by the agreement signed with the primary broker.

  • Securities Lending Partners

Securities lending firms work with brokerages to facilitate short selling and provide access to borrowable securities, which can be essential for traders looking to profit from declining stock prices.

  • Authorised person 

An authorised person is a type of business partner who has been approved or nominated by a securities broker or an NSE trading member. The approved person is granted access to a stock exchange’s trading platform/s in order to undertake trading in the name of clients. 

The authorised person must be registered with the broker and classified as an authorised person with the brokerage firm. The sole distinction that separates an authorised person and a sub-broker is that a sub-broker must register with SEBI, whilst an authorised person must merely apply for registration with the exchange in question.

Also Read: Authorised person under FEMA

  • Affiliate Marketer

Affiliate marketers partner with brokerage firms to promote their services to potential clients. They earn commissions or referral fees for each client referred to the brokerage who opens an account and conducts trades

  • Remisier

A financial remisier is simply a broker’s agent. A remisier operates on a commission basis, as opposed to merchants who are paid a set salary. As an Authorised person, a remisier’s major responsibility is to recruit clients who will make investments in their assets via the remisier or the brokerage firm. 

The remisier receives a part of the brokerage income. In many circumstances, the remisier obtains a 30% commission; nevertheless, this number fluctuates from business to firm. As a result, the remisier has the option of working with many stock brokerage firms or dealing with a single brokerage firm. In the latter case, the brokerage firm provides a private place where the remisier may work out.

The remisier is fully responsible for the clients they refer to the brokerage company. This involves being liable for a client’s security deposit as well as fee segregation in several parts. To become a remisier for a brokerage business, an individual must execute an agreement with the brokerage firm. Furthermore, the remisier has to pay an initial deposit to that brokerage business, which is recoverable upon leaving.

  • Custodians

Custodial banks or firms safeguard clients’ assets, including stocks and securities, on behalf of brokerages and asset managers. They play a crucial role in ensuring the security of clients’ holdings.

Also Read: Authorised Person Exam


In the dynamic world of the stock market, diverse types of business partners form the critical connective tissue, enabling seamless transactions and enhancing the investor experience. From introducing brokers and white-label providers to technology innovators and regulatory consultants, these entities play specialized roles, enriching the market’s ecosystem.

By offering access, expertise, and infrastructure, they empower investors and brokerage firms alike. Together, they foster innovation, ensure compliance, and facilitate efficient trading, contributing to the stock market’s enduring vitality as a pivotal engine of global finance. In this intricate web of collaboration, business partners emerge as essential enablers of success in the ever-evolving stock market landscape.

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