NRI & Foreign National LLP
NRIs and Foreign Nationals starting or investing in a business in India have mainly done through a private limited company, as it allowed for 100% Foreign Direct Investment (FDI) under the automatic route for many of the sectors.
What is LLP for Foreign Nationals and NRI?
Foreign nationals who want to invest for a business in India have earlier done through a private limited company, as it allowed for 100% FDI under automatic route for many of the sectors. Now to allow NRIs and Foreign Nationals to freely invest in businesses in India and improve foreign investment, The government has now allowed 100% FDI in LLP under the automatic route.Limited liability partnership is one of the new forms of business entity in India governed through the LLP Act, 2008. Earlier, investment in LLP by NRI or Foreign national required Government approval. It has made the process a long, cumbersome and expensive process. Thus company registration was preferred over LLP registration by NRIs and Foreign Nationals. As there is relaxation of FDI norms so the LLP registration can be done easily by NRIs and Foreign Nationals.
Is FDI in LLP allowed?
100% FDI in LLP is now allowed for businesses operating in sectors/activities where 100% FDI is allowed through the automatic route.What is the Registration Process for Foreign nations & NRI?
Obtaining DSC
DSC must be obtained for the proposed partners of the LLP. It is necessary for obtaining the Designated Partners Identification Number (DPIN). For this purpose, the NRI or foreign national must submit the signed DSC application along with a notarized copy of passport and Address proof.Name Approval of Company
After obtaining DPINs an application for reservation of name of LLP can be made to the MCA. The application for a name can obtain up to six names that are acceptable as per the LLP Act, 2008. The name should be unique as per the norm of the LLP Act and must not be similar to an existing company or LLP name.Incorporation of LLP
On the basis of Name approval provided by the Government, now the partners can submit an application for incorporation of LLP to the Government along with the necessary documents including the subscribers’ sheet. After acceptance of an application, MCA will provide a certificate for incorporation.LLP agreement filing
Now LLP agreement must be signed and filed by the Partners within 30 days. In case the LLP agreement is not filed then it may lead to the heavy penalty which accrues on a daily basis.What are the advantages of NRI and LLP Registration?
1. Separate Legal Entity
An LLP, like a company, is a separate legal entity. The LLP is not the same as its partners. A limited liability partnership (LLP) can sue and be sued in its own name. The contracts are signed in the name of the LLP, which aids in gaining the trust of numerous stakeholders and instilling confidence in the business among consumers and suppliers.2. The partners' responsibility is limited
The LLP's partners are only liable to a certain extent. The partners' responsibility is restricted to the amount of money they put in. This implies individuals are just responsible for the amount of contributions they made and are not personally liable for any business losses. If an LLP is bankrupt at the time of its dissolution, only the assets of the LLP are responsible for paying its obligations. The partners are free to function as reputable businesspeople since they have no personal responsibilities.3. Cost-effectiveness and lack of compliance
In comparison to founding a public or private limited company, the expense of forming an LLP is minimal. The LLP's compliance requirements are very low. Only two statements are required to be filed yearly by the LLP: an Annual Return and a Statement of Accounts and Solvency.4. There is no minimum capital contribution requirement
There is no minimum capital requirement for forming an LLP. Before incorporating, there is no obligation to have a minimum paid-up capital. It can be founded with whatever amount of capital that the partners contribute.Required Documents
| Acceptable Document | Document Type | Additional Details |
|---|---|---|
| Valid Mobile Number and Email ID | . | .. |
| Passport Size Photo | . | . |
| Self Certified Passport ( Apostille & Notarized) | . | , |
| Digital Signature | . | . |
| Self Attested Residential Address Proof (Apostille & Notarized) | . | . |
FAQs
You Ask, We Answer
Yes, a foreigner can be a partner or even a designated partner in a Limited Liability Partnership and this includes foreign companies as well. A person resident outside India or an entity incorporated outside India shall be an eligible investor for the purpose of foreign investment LLP.
If foreign national is residing outside at the time of incorporation, the all the incorporation documents with ID and address proof of foreign national must be notarized before the notary of the country of their origin and duly apostillised.
As prescribed by the MCA, LLP is required to file LLP Form 8 (Statement of Account & Solvency) and LLP Form 11 (Annual Return) annually. The ‘Annual Return’ is required to be filed within 60 days of close of the financial year and ‘Statement of Accounts & Solvency’ shall be filed within 30 days from the end of six months of the financial year to which it relates. Every LLP has to maintain uniform financial year ending on 31st March of a year.
As stated by the MCA and according to the LLP Act, 2008 Foreign LLP can establish a place of business in India by filing Form 27 giving the particulars of incorporation of foreign LLP, details of DPs/ partners of that foreign LLP and details of atleast two authorised representatives for complying with regulation of LLP act.
No, name of the LLP shall end with either “Limited Liability Partnership” or “LLP” only.
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