FDI is the controlling ownership in a business enterprise in one country by a share based in another country. After the change in the FDI regulations , now 100% FDI is permitted in LLP under the automatic route . There are other FDI benefits as well wherein LLPs will be allowed to make investment in another company/LLP sector with 100% FDI under automated route and there will be no conditions for FDI linked performance.
Equity which means shares issued by a company and Private Equity is the stock of capital that is not intimated on a public exchange instead it is the direct investment in the enterprise. The private equity capital comes from the retail and institution investors. Since India has continuously kept up the financial growth and the diversity in India attracts NRIs to invest in the Indian Market. This is a detailed guide of a Foreigner Nationals registering an LLP in India.
Incorporation of a Limited Liability Partnership is a very new form of business introduced in India under the LLP Act 2008. Before November 2015 incorporation of LLP was not allowed without Government approval for the NRIs. Due to this terms and conditions LLP for the Foreigners was a very lengthy and expensive process, but after 2015 with the introduction and amendment in Law the LLP incorporation for foreign national is equally easy. It is the best business for to establish a small firm in India under FDI.
The LLP Act 2008 allows the FDI including Foreign Companies and LLPs for incorporation in India but there needs to be a minimum of one designated partner who is an Indian(both the Indian Citizen and Resident). The partners also need to fulfill the relevant Foreign exchange laws/regulations/guidelines/rules.
There are certain steps associated with the incorporation of a Limited Liability Partnership for NRIs
The Structure: The firm needs to have a minimum of two partners and among the partners, it is must to have atleast one of Indian origin i.e. both citizen and resident of India. There can be a combination of NRIs or Foreign Companies holding 100% shares of the Indian Limited Liability Partnership.
The Digital Signature Certificate needs to be obtained for the partners and the proposed partners of the LLP, because without DSC you cannot obtain the DPIN(Designated Partner Identification Number). The DSC must be signed by the NRIs and the copy of documents must be attached to it.
Documents to be attached for NRIs are:
For a foreign national all the documents are to be notarized by the authorized professionals.
For the foreigners residing in India, the documents required are:
All above documents are to be signed by Individual's Embassy. The graphical representation below will help you in understanding the filing of DSC form.
According to the LLP Act, 2008, a Designated Partner Identification Number(DPIN) should be obtained for the partners of the LLP. Once the DSC(Digital Signature Certificate) is obtained it is easy to get the DPIN for the designated partners. There must be a minimum of two DPIN numbers , to go to the next step which is Name Approval.
An application of LLP is made with the Ministry of Corporate Affairs(MCA) once the DIN is obtained for two partners. There needs to be six options for names based on preference based on the LLP Act 2008. The Name must not be generic and needs to have distinct & unique structure according to the MCA regulations, and once the name is approved the incorporation is done within 60days.
The partners can file the LLP application with MCA along with the required documents including the subscribers sheet. Once the application is approve the Certificate of Incorporation is provided and the partners can commence with their business.
Finally, after receiving the incorporation certificate, the LLP agreement is signed and filed by the partner within 30 days. In case the LLP Agreement is not filed then heavy penalty charges and imposed on the partners.
click here to Register a Limited Liability Partnership in India