Liaison Office: A LO( also known as Representative Office) can | ||
undertake only liaison activities, i. e., it can act as a channel of communication between the head office abroad and parties in |
Q. 19 What is a Limited Liability Partnership? |
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India. It is not allowed to undertake any business activity in |
Limited Liability Partnerships: The LLP format allows corporate |
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India and cannot earn any income in India. Expenses of such |
business entity along with the benefits of limited liability. At |
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offices are to be met entirely through inward remittances of |
the same time, it allows the members the flexibility of |
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foreign exchange from the head office outside India. |
organizing their internal structure as a partnership based on |
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Permission to set-up a LO in India is initially granted for a |
mutually-agreed terms. Like a private limited company, LLP is |
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period of 3 years and this is likely to be extended from time to |
a body corporate having a distinct legal entity. The LLPs are |
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time. Upon expiry of the validity period, these entities have to |
governed by the LLP Act 2008. However, the RBI has still not |
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either close down or be converted into a Joint Venture( JV) / |
notified the LLP structure in FEMA. |
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Wholly Owned Subsidiary( WOS), in conformity with the extant
Foreign Direct Investment policy.
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FDI will be allowed through the government approval route, only in LLPs operating in sectors / activities where 100 % FDI is |
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Specified Activities: |
allowed through the automatic route and sectors are not |
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( i) |
Representing in India the parent company / group |
subject to additional conditions. |
companies; |
The other details can be seen from page numbers 16 and 17 |
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( ii) Promoting export / import from / to India;
( iii) Promoting technical / financial collaborations between parent / group companies and companies in India;
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on the following link-
( http:// dipp. nic. in / English / Policies / FDI _ Circular _ 01 _ 2013. pdf).
The LLP act and rules can be seen from the following link-
( http:// www. mca. gov. in / LLP /).
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( iv) Acting as a communication channel between the parent company and Indian companies. |
The details of registering a New LLP and reporting requirements can be seen from the following links- |
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Branch Office: The BO should be engaged in the activity in which the parent company is engaged. Retail trading activities of any nature are not allowed for a BO in India. A BO is, also not allowed to carry out manufacturing( except in an SEZ) or |
( http:// www. mca. gov. in / LLP / RegisterNewComp. html),
( http:// www. mca. gov. in / LLP / CARFiling. html)
Q. 20 Is it possible to dissolve the LLP in India?
|
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processing activities in India, directly or indirectly. Profits |
The details of LLP closure can be seen from the following linkearned |
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by BO are freely remittable from India, subject to |
( http:// www. mca. gov. in / LLP / CloseCompany. html). |
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payment of applicable taxes |