Company Secretary and Law: GOVERNMENT ALLOWS FDI IN LLPs

Company Secretary and Law: GOVERNMENT ALLOWS FDI IN LLPs: The new FDI Policy of the Government of India which came into force from 10th April 2012 does not show any change in the FDI policy as regar...

GOVERNMENT ALLOWS FDI IN LLPs

The new FDI Policy of the Government of India which came into force from 10th April 2012 does not show any change in the FDI policy as regards Limited Liability Partnerships. In sectors where 100% FDI is allowed, LLPs are also entitled to receive 100% FDI. However the sectors where such permission is allowed subject to certain conditions, FDI in an LLP that is operating / intends to operate in such a sector will not be availabe under the automatic route. FDI is not allowed in LLPs in agricultural / plantation or real estate sectors. While a company entitled to receive FDI may undertake the activity concerned through a down stream LLP, an LLP permitted to receive FDI is not allowed to carry on that activity through any other down stream entity, say an LLP or a company. In other words, so far as FDI is concerned, for the present the Government does not seem to be inclined in allowing a holding company type of structure for LLPs.