Friday, April 25, 2014

SECTION 185 OF COMPANIES ACT 2013- A SIMPLIFIED APPROACH

SECTION 185 OF COMPANIES ACT 2013- A SIMPLIFIED APPROACH

As per Section 185 of the Companies Act 2013 which is effective from 12th September 2013, the following points are to be noted in relation to loan and/or guarantee and/or security to be provided:

1)         A private or public company can’t grant loan or can extend guarantee or provide security (in relation to any loan) to its directors, or director of holding companies or relative of directors.

2)         A private company can’t provide loan or extend guarantee to another private company if there is a common director or common directors in both the companies.

3)         A private company (lender/guarantor company) can not provide loan or extend guarantee to another private company (borrower company) if the lender/guarantor company’s director or directors are shareholders of the borrower company.

4)         A private company can’t provide loan or extend guarantee to any firm in which any director of such private company or his relative is a partner.

5)         A private company (lender/guarantor company) can’t provide loan or extend guarantee to any private company in which the director of such lender/guarantor company is a shareholder.

6)         A private company can’t grant loan or extend guarantee to a public company if any one or more director whether alone or together holdes 25% shares.

7)         A public company can’t grant loan or extend guarantee to any company (private or public) if any director along or alongwith other directors’ are holding 25% shares or more in that company (borrowing company)

8)         A public company can grant loan or extend guarantee to any public company provide that the directors (one or more) of guarantor company are not holding 25% or more voting shares in the borrowing company.

9)       Any company (private or public) can’t provide any loan or extend guarantee to any body corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending/guarantor company.

10)       A public company may provide loan or extend guarantee to another public company even if there are common directors provided that conditions of point 8 and 9 above are complied with.

11)       Any company (private or public) can provide loan or extend guarantee to its a managing or whole-time directoras a part of the conditions of service extended by the company to all its employees or pursuant to any scheme approved by the members by a special resolution

12)       Any company (private or public) can provide loan or extend guarantee or provide security if it is in the ordinary course of its business at an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India.

RELATIVE

A person shall be deemed to be the relative of another, if he or she is related to another in the following manner, namely:-

(i)                   If they are members of a Hindu Undivided Family;
(ii)                 they are husband and wife; or
(iii)               Father: Provided that the term “Father” includes step-father.
(iv)               Mother: Provided that the term “Mother” includes the step-mother.
(v)                 Son: Provided that the term “Son” includes the step-son.
(vi)               Son’s wife.
(vii)             Daughter.
(viii)           Daughter’s husband.
(ix)               Brother: Provided that the term “Brother” includes the step-brother;
(x)                 Sister: Provided that the term “Sister” includes the step-sister.



Disclaimer: This is not an opinion. Prior advise should be obtained before acting on the same. 

Monday, January 13, 2014

POSSIBLE ENTRY OPTIONS FOR SETTING UP AN ENTITY AND DOING BUSINESS IN INDIA

VARIOUS POSSIBLE ENTRY OPTIONS FOR SETTING UP AN ENTITY AND DOING BUSINESS IN INDIA

A foreign company has the following entry options for doing business in India:

·      As an incorporated entity i.e. wholly owned subsidiaries and joint venture companies and limited liability companies; and

·         As an unincorporated entity i.e. liaison, project and branch offices.

These entry options are discussed below:

AS AN INCORPORATED ENTITY


The incorporated entities may be in the form of:

(i)         Wholly Owned Subsidiaries (“WOS”); or
(ii)        Joint Ventures (“JV”)
(iii)       Limited Liability Partnerships (“LLP’s”)

WOS OR JV COMPANY

The WOS or JV may be set up either as a private limited company or a public limited company under the Companies Act, 1956 (“Act” or “CA”). For registration and incorporation of private or public company, an application has to be filed with the Registrar of Companies of the relevant state in which the company is to be incorporated (“ROC”). Once a company has been registered and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.

The main characteristics of a private company and a public company are as follows:

I. A private limited company is a company which

  • Has a minimum paid up share capital of INR 100,000 or a higher paid-up capital as may be prescribed by its articles of association
  • Restricts the right to transfer shares by its articles of association.
  • Prohibits any invitation to the public to subscribe for any shares in the company.
  • Prohibits any acceptance of deposits from persons other than members, directors or their relatives.
  • Can be formed with a minimum of two members and two directors.
  • Limits the number of its members (shareholders) to fifty.  

II.         A public company is a company which:

  • Is not a private limited company
  • Has minimum paid up capital of INR 5,000,000
  • Is a private company, which is subsidiary of a company, which is not a private company.

Setting up of a private limited company in India is preferred as opposed to a public limited company for the following reasons:

  • Private companies are exempt from various compliances under the Act.
  • In case, it is decided to form a joint venture with a domestic partner, a private company would be best suited. Also in case the Indian entity is not proposing to raise funds from the public, a private limited company would be more suitable.
  • Further, it is possible to impose restrictions on transferability of shares of a private company.

A private company can be formed with a minimum of two members and two directors. For a foreign company to set up a Wholly Owned Subsidiary (WOS) as a private company, the entire share capital of WOS should be held by minimum two foreign companies. It may be noted that the second foreign company may hold the shares (holding of one share would be sufficient) as a nominee of the parent foreign company.

The first step is to apply to the Registrar of Companies (RoC) in Form 1-A to make the proposed company’s name available. The minimum number of the shareholders for a Private Limited Company is two (2) and the maximum fifty (50). In a Public Limited Liability Company, the minimum number of shareholders is seven (7) and there is no upper limit for the maximum number of shareholders.

In the Form 1-A, the names of prospective directors or promoters, authorised capital and choice of three names of the proposed company in the order of preference, are required to be stated. The RoC usually takes a decision with regard to the availability of the name within two weeks of receiving a complete application. In the event, the Indian company shall be using the name of the parent company as part of the Indian company's corporate name, a "No Objection Letter" from the parent company will be required.

Once the name is made available, the Memorandum and Articles of Association of the Company need to be filed for registration with the RoC. The minimum authorised share capital required for incorporating a private limited company in India is Rupees One (1) Lakh. The fees payable to the RoC vary based upon the authorized share capital of the company. Upon registration of the Articles of Association, the Certificate of Incorporation is issued and from that date, the company comes into existence and can commence business and execute contracts in its own name.

The minimum authorized share capital required for incorporating a private limited company in India is Rs. 1,00,000/- (Rupees One Lakh only). .

Taxation

Tax structure on Companies is as follows:
Tax on Profits:                         30%
Education cess:                        3 % on income-tax (inclusive of surcharge, if any)

Note:
1.      Surcharge is applicable @ 7.5 percent if total income is in excess of INR 10,000,000. Marginal relief may be available.

Minimum Alternative Tax

MAT is levied @ 18.5 percent of the adjusted book profits in the case of those companies where income-tax payable on the taxable income according to the normal provisions of the Income-tax Act, 1961 (the Act), is less than 18.5 percent of the adjusted book profit.

Further surcharge is applicable @ 7.5 percent in the case of domestic companies if the adjusted book profits are in excess of INR 10,000,000. Marginal relief may be available.

Further education cess is applicable @ 3 percent on income-tax (inclusive of surcharge, if any)

Dividend Distribution Tax (DDT)

The Indian Company is liable to pay Dividend Distribution Tax (DDT) @ 16.609 percent (i.e. inclusive of surcharge and education cess) on dividends declared.

LIMITED LIABILITY PARTNERSHIP’S

Government of India has allowed FDI in LLP’s however LLPs with FDI will not be allowed to operate in agricultural/plantation activity, print media or real estate business. FDI in LLP is allowed with the previous approval of the Government. Further it is allowed with the Government’s approval only in those sectors in which 100% FDI is allowed under automatic route under the FDI policy. Thus those sectors which are not available under automatic route is not available for FDI in LLP. The followings are some conditions with respect to FDI in LLP’s.

v  LLPs with FDI will not be eligible to make any downstream investments.

v  Foreign Capital participation in LLPs will be allowed only by way of cash consideration.

v  Investment in LLPs by Foreign Institutional Investors (FIls) and Foreign Venture Capital Investors (FVCIs) will not be permitted.

v  LLP’s are not allowed to raise ECB (external commercial borrowings)

Taxation on LLP’s

Tax structure on LLP’s is as follows:
Tax on Profits:                         30%
Education cess:                        3 % on income-tax (inclusive of surcharge, if any)

Minimum Alternative Tax

MAT is levied @ 18.5 percent of the adjusted book profits in the case of those LLP’s where income-tax payable on the taxable income according to the normal provisions of the Income-tax Act, 1961 (the Act), is less than 18.5 percent of the adjusted book profit.

Further education cess is applicable @ 3 percent on income-tax (inclusive of surcharge, if any)

Note:
1.      No surcharge is applicable
2.      No tax is applicable on distribution of profits amongst the partners. However the salary and remuneration as paid by the LLP to the partners is taxable in the hands of partners.


UNINCORPORATED ENTITIES


The unincorporated entities, as detailed hereunder, are formed for specific purposes and are regulated by the Foreign Exchange Management Act, 1999 as well as the Companies Act, 1956.

  • Branch Office
  • Liaison Office/ Representative Office
  • Project/ Site Office

Such offices can undertake activities permitted under the Foreign Exchange Management (Establishment in India of branch or office or other Place of Business) Regulations, 2000.

BRANCH OFFICE

Foreign entities are allowed to set up branch offices in India for the following purposes:

                                i.            Export/Import of goods.
                              ii.            Rendering professional or consultancy services.
                            iii.            Carrying out research work, in which the parent company is engaged.
                            iv.            Promoting technical or financial collaboration between Indian companies and parent or overseas group company.
                              v.            Representing the parent company in India and acting as buying/selling agent in India.
                            vi.            Rendering services in Information Technology and development of software in India.
                          vii.            Rendering technical support to the products supplied by the parent/group companies foreign airline/shipping Company.

It is clarified that a branch office does not have a separate legal identity from its parent and any liability of the branch would be the liability of the parent foreign entity. A branch office may remit outside India the profit of the branch net of applicable Indian taxes and subject to the Reserve Bank of India (“RBI”) guidelines. Grant of permission for setting up branch offices is to be obtained from the RBI.

Taxation on Branch Offices:

Tax on Profits:                         40%
Education cess:            3 % on income-tax (inclusive of surcharge, if any)
Surcharge:                    2.5%


LIAISON OFFICE/REPRESENTATIVE OFFICE

The liaison office represents a point of contact between Indian customers and the foreign company. The role of the liaison office is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote export from India and import to India and also facilitate technical/financial collaboration between the parent company and companies in India. The liaison office merely acts as a communication channel between the parent company and the Indian companies.

A liaison office is not permitted to engage in any trading or to undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Grant of approval for the establishment of a liaison office in India is also to be obtained from the RBI.

Since liaison offices are not allowed to carry out any commercial activity they are not liable to pay taxes as there is no income.

Project/Site Office

Foreign companies planning to execute specific projects in India can set up temporary project/site offices in India. These offices cannot undertake activities other than those, which are incidental to the execution of the project. Upon completion of the project, project offices may remit the surplus of the project, net of applicable taxes, outside India.

SETTING UP OF BRANCH OFFICE/ LIAISON OFFICE IN INDIA

In accordance with the provisions of the Foreign Exchange Management Act and rules and guidelines issued there under, the applications from foreign companies (a body corporate incorporated outside India, or a firm or other association of individuals) (foreign entities) for establishing Branch Offices (BO) / Liaison Office (LO) in India are considered by the Reserve Bank under two routes:

Ø  Reserve Bank Route — Principal business of the foreign entity falls under sectors where 100 per cent foreign direct investment (FDI) is permissible under the automatic route.

Ø  Government Route — Principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category and Non - Government Organisations / Non - Profit Organisations / Government Bodies / Departments are considered by the Reserve Bank in consultation with the Government of India, Ministry of Finance.

The application for establishing BO / LO in India may be forwarded by the foreign entity in Form FNC through a designated AD Category - I bank (i.e. an AD Category – I bank identified by the applicant with whom they intend to pursue banking relations) to the Reserve Bank of India, along with the prescribed documents. The AD Category Bank shall forward the application together with their comments/ recommendations to the Reserve Bank.

Approval of the Reserve Bank is not required to establish a branch/unit in Special Economic Zones for undertaking manufacturing and service activities, subject to compliance with the conditions specified in this regard.

The Reserve Bank or the Government of India, as the case may be, reserves the right to reject an application for non-fulfillment of any other condition/s not specifically referred, fulfillment of which, in the opinion of the Reserve Bank / the Government of India, is necessary for grant of such permission or in the public interest. The Reserve Bank or the Government of India, as the case may be, also reserves the right to verify / examine the activities of the BO / LO of the foreign entities established in India and to withdraw the permission already granted, after due notice, if the circumstances so warrant or due to changes in the policy.

The BO / LO shall obtain Permanent Account Number (PAN) from the Income Tax Authorities on setting up of their office in India and report the same in the Annual Activity Certificate.

ELIGIBILITY CRITERIA FOR ESTABLISHMENT OF BRANCH / LIAISON OFFICE IN INDIA

(i) Eligibility Criteria
An application from a foreign entity to establish Branch / Liaison Office in India is considered on the basis of two criteria viz: basic and additional:

Basic criteria
Ø  Reserve Bank Route — Principal business of the foreign entity falls under sectors where 100 per cent foreign direct investment (FDI) is permissible under the automatic route.

Ø  Government Route — Principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category are considered by the Reserve Bank, in consultation with the Government of India, Ministry of Finance.

Additional criteria

Ø  Track Record
v  For Branch Office — a profit making track record during the immediately preceding five financial years in the home country.
v  For Liaison Office — a profit making track record during the immediately preceding three financial years in the home country.

Ø  Net Worth [total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name].
v  For Branch Office — not less than USD 100,000 or its equivalent.

v  For Liaison Office — not less than USD 50,000 or its equivalent.

Applicants that do not satisfy the eligibility criteria and are subsidiaries of other companies may submit a Letter of Comfort from their parent company, subject to the condition that the parent company satisfies the eligibility criteria as prescribed.

(ii) Application Form and Documentation
Applications in Form FNC duly completed in all respects and signed by the authorized signatory of the foreign entity in the home country may be submitted along with the Letter of Comfort, wherever applicable, to the designated AD Category - I bank for onward transmission to the Reserve Bank, along with their comments and recommendations and the prescribed documents.

SCOPE OF ACTIVITIES PERMITTED REGARDING FUNCTIONING OF A BRANCH OFFICE / LIAISON OFFICE IN INDIA

Permitted activities
Permitted activities for a Branch / Liaison Office in India would be as under:
Branch Office
Ø  Export/import of goods.
Ø  Rendering professional or consultancy services.
Ø  Carrying out research work, in which the parent company is engaged.
Ø  Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
Ø  Representing the parent company in India and acting as buying/ selling agent in India.
Ø  Rendering services in Information Technology and development of software in India.
Ø  Rendering technical support to the products supplied by parent/group companies.
Ø  Foreign airline/shipping company.

Normally, the Branch Office should be engaged in the activity in which the parent company is engaged.

Liaison Office
Ø  Representing the parent company / group companies in India.
Ø  Promoting export / import from / to India.
Ø  Promoting technical/ financial collaborations between parent / group companies and companies in India.
Ø  Acting as a communication channel between the parent company and Indian companies.


The aforesaif information is a general information and not a legal advise or recommendation. Any interpretations thereof are subject to change or modification by subsequent legislative, regulatory, administrative or judicial decisions. Specific advice should be taken  before acting on the basis of information provided. 

Saturday, September 8, 2012

FOREIGN DIRECT INVESTMENT IN LIMITED LIABILITY PARTNERSHIPs (LLPs) IN INDIA AND SUITABILTY OF LLP STRUCTURE IN INDIA


FDI IN LLPs  IN INDIA AND SUITABILTY OF LLP STRUCTURE IN INDIA

Limited Liability Partnership (“LLP”) is a developing form of corporate structure in India for doing business in India. It is a mix form of a limited liability company and a partnership firm. It has both the limited liability benefit, perpetual succession with partnership structure lies in its soul. This structure has been introduced by the Government of India in 2008 by passing LLP Act 2008.

Since LLP form of business is very popular in foreign countries, it became necessary for the Government to clear its stand on allowing FDI in LLPs considering the present global economic and business development and status of India as a destination of foreign investment. To address the issue of FDI in LLP firms in India Cabinet Committee on Economic Affairs (‘CCEA’) issued a press release on 11th May 2011, proposing the regulatory outline permitting FDI in LLP. Subsequent to the proposal, the Government of India has allowed FDI in LLPs and decided to permit FDI in LLP firms, subject to specified conditions.    Accordingly, the provisions were made in ‘Circular 1 of 2011-Consolidated FDI Policy’, which became effective from April 1, 2011.

 The latest provisions related to foreign direct investment in LLP’s in India is contained in the the consolidated FDI policy (“Policy”) dated April 10, 2012 effective from April 10, 2012 issued by the DIPP, Ministry of Commerce and Industry, Government of India (“the FDI Policy”). The provisions are briefly discussed below:  

As per para 3.2.5 (a) FDI policy FDI in LLP’s will be allowed only through Government approval route. Further FDI in LLP would be allowed only in those sectors where 100% FDI is permitted under automatic route.

FDI in LLP in Trading Business

The FDI Policy specifically states that 100 % FDI is allowed under automatic route in Cash & Carry Wholesale Trading/ Wholesale Trading business and also clarifies that Cash & Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Further wholesale trading would include resale, processing and thereafter sale, bulk imports with ex-port/ex-bonded warehouse business sales and B2B e-Commerce.

Further, in terms of the Policy the followings are the guidelines for carry on whole sale trading:
a) Acts/Regulations/Rules/Orders of the State Government/Government Body/Government Authority/Local Self-Government Body under that State Government should be obtained;

b)     sales made by the wholesaler shall be to the valid business customers;

c)      full records indicating all the details of such sales like name of entity, kind of entity, registration/license/permit etc. number, amount of sale etc. should be maintained on a day to day basis.

d)     whole sale trade of goods would be permitted among companies of the same group. However, such WT to group companies taken together should not exceed 25% of the total turnover of the wholesale venture

e)     whole sale trade can be undertaken as per normal business practice, including extending credit facilities subject to applicable regulations.

f)  a wholesale/cash & carry trader cannot open retail shops to sell to the consumer directly.

Thus, if the proposed trading activity is  whole sale trading, it is allowed under automatic route up to 100% and  no approval will be required.  Though 100% FDI is allowed in LLP’s in case of wholesale trading that will require prior Government approval.

LIMITATIONS OF LLP FORM OF BUSINES WITH FOREIGN INVESTMENT

As per para 3.2.5 (a) of the FDI Policy FDI in LLP is allowed only through Government route. Further FDI in LLP through Government route is allowed to only those sectors where 100% FDI is allowed under automatic route under FDI policy. That is a foreign company or individual can invest in LLP in India but it requires prior Government approval.


Further, in terms of para 3.2.5 (c) of FDI Policy, an Indian company, having FDI, will be permitted to make downstream investment in a LLP only if both-the company, as well as the LLP- are operating in sectors where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions.

Further, in terms of para 3.2.5 (d) of the FDI Policy LLPs with FDI will not be eligible to make any downstream investments. (Downstream investments refers to further investment by LLP in which there is already foreign direct investment is there into other companies or LLP)

Further, in terms of para 3.2.5 (e) of the FDI Policy foreign Capital participation in LLPs will be allowed only by way of cash consideration. It refers that contribution in any other form than cash is not allowed.

Further, in terms of para 3.2.5 (e) of the FDI Policy investment in LLPs by Foreign Institutional Investors (FIls) and Foreign Venture Capital Investors (FVCIs) will not be permitted.

LLP is not allowed to raise External Commercial Borrowing (“ECB”). Thus LLP can not take commercial loans from its foreign partners, FII’s, banks from outside India, any financial institution outside India or any other entity outside India.

As per section 27 of the Limited Liability Partnership Act 2008 the limited liability partnership is liable if a partner of a limited liability partnership is liable to any person as a result of a wrongful act or omission on his part in the course of the business of the limited liability partnership or with its authority.

Partners Liability is unlimited for his personal acts.

LLP is more recognized for services sector. A note by the Ministry of Corporate Affairs on LLP as available on LLP website (www.llp.gov.in) recommend and describes the suitability only for the services sectors and professionals as follows:

            +      Persons providing services of any kind

+       Enterprises in new knowledge and technology based fields where the corporate form is not suited.

      +    For professionals such as Chartered Accountants (CAs), Cost and Works Accountants (CWAs), Company Secretaries (css) and Advocates, etc.

         +       Venture capital funds where risk capital combines with knowledge and expertise

         +       Professionals and enterprises engaged in any scientific, technical or artistic discipline, for any activity relating to research production, design and provision of services.

            +          Small Sector Enterprises (including Micro, Small and Medium Enterprises)

            +          Producer Companies in Handloom, Handicrafts sector

REPATRIATION OF PROCEEDS AND PROFITS

The FDI policy is silent about the repatriation of profits/ winding up proceeds of the LLP. Since FDI in LLP is allowed under Government route, repatriation and remittance matters may be subject to the discussion and approval while considering approval FDI in proposed LLP. Thus repatriation may or may not be allowed. The Government may come up with certain policies/provisions on the repatriation/ remittance of the proceeds of LLP, but nothing can be commented right now. Thus please note that remittance/ repatriation may be subject to the consideration or conditions as may be imposed upon by the Government while granting approval.

Thus in the light of this, it can be said that repatriation of profit or other proceeds depends upon the conditions as may be imposed upon by the Government while granting approval for FDI. Hence, nothing can be commented on repatriation of the proceeds under LLP form.

EXIT OPTION

Exit under LLP form is possible in the following manners:

              a)       Sale of partner’s interest to one of the party subject to condition of minimum two members.

              b)       Winding up of LLP

Please note that sale of Partner’s interest by one party (partner) to another or to any third party in LLP is Governed by the LLP agreement, as  LLP act does not restrict transfer of partner’s interest. Hence any party is allowed to transfer its interest in LLP subject to LLP agreement.

It is to be further noted that repatriation of the amount of out exit proceeds is not specifically allowed under the FDI policy and no clear guidelines have been issued in this regard. So repatriation may be subject to the conditions as may be imposed upon by the Government while granting approval. Further the Government may come up with certain specific provisions for repatriations of proceeds of LLP which may or may not allow repatriation.

TAXATION

Tax structure on LLP’s is as follows:

Tax on Profits:                      30%
Education cess:                     3 % on income-tax (inclusive of surcharge, if any)

Minimum Alternative Tax

MAT is levied @ 18.5 percent of the adjusted book profits in the case of those LLP’s    where income-tax payable on the taxable income according to the normal provisions of the Income-tax Act, 1961 (the Act), is less than 18.5 percent of the adjusted book profit.
Further education cess is applicable @ 3 percent on income-tax (inclusive of surcharge, if any)

Note:
1.         No surcharge is applicable

2.      No tax is applicable on distribution of profits amongst the partners. However the salary and remuneration as paid by the LLP to the partners is taxable in the hands of partners.

From taxation point of view LLP may be an economic structure as compared to a company as there is no dividend distribution charge on the profits distribution of LLP. Further if the profit exceeds the above mentioned limited LLP will also save 10% surcharge. The LLP can be said to have two tax advantage over company i. e. saving of dividend distribution tax and surcharge.

However the Government may consider for imposition of taxes on distributed profits of LLP like dividend distribution tax as in company. No such proposal is available till now but there may be possibilities and a provision of such tax may come in future.

To conclude, it can be said that LLP is a new concept in India and hence, most of the laws (e. g. labour laws, environmental laws, corporate laws) are not clear about its applicability on this form, which may or may not be applicable depending upon the Government clarification from time to time, also which may be favourable or unfavourable for LLP, while company is a well established form and specific and clear provisions are provided in various statues, so no question of disputes. Therefore, Government still need to bring more clarity in the laws regulating LLP and FDI related provisions in the LLP form of business.

Note: the views of the author are personal and do not constitute any kind of opinion.