Registering LLP as a NBFC with RBI

Can a LLP be registered as a NBFC company? Well, this discussion was carried on a facebook discussion.

Posting the discussion here for your reference:

Can a LLP be registered as NBFC with RBI? If a LLP has large investments (done through own funds, no deposits, no borrowings) and derives its income through dividends/interest, then would be called a NBFC on asset/income criteria? In such case, what is the option for the LLP? RBI would neither give it registration nor would allow it to continue.

Replies to this post:

Pawan Goyal For registration of NBFC, Only company Form of structure is recoganised by RBI. LLP can do any business it likes.There is no bar under the LLP Act. Only ROC should recoganise its main objects.
Like · Reply · 4 · February 18 at 6:01pm
 
PC Agrawal Sec.45-I(f) of RBI Act defines NBFC as:
i) a financial institution which is a company
ii) a non-banking institution which is a company ..........See More
Like · Reply · Yesterday at 11:15am · Edited

 

CSdiponkar Banerjee LLP object cannot be that of NBFC ROC will not approve LLP1 if the object of NBFC is mentioned.
Like · Reply · 23 hrs
 
Ramchandra Pore This is a absolute grey area. The law doesn't object LLP doing NBFC business. But ROC and RBI will not allow it. If an existing LLP with some other object, undertakes investment activities, what will happen? How they are going to find out? What law is it violating?
Like · Reply · 23 hrs
 
Pawan Goyal Why the ROC will object for LLP doing investment activities as he also know that Definition of NBFC as per RBI is only for company and not for LLP. As for my information goes many LLP are doing investment business
Like · Reply · 19 hrs
 
PC Agrawal Sec.45S of RBI Act indirectly permits undertaking non-banking financial business by unincorporated bodies including partnership firms covered under Partnership Act. It restricts such firms from accepting deposits if the business wholly or partly includes activities covered u/s 45-I(c). Hence one can say that LLPs which are incorporated bodies will be definitely permitted to undertake such activities.

However, requirement of registration u/s 45-IA applies only to NBFCs, i.e. companies and not to LLPs.
Banking Legal Company-Law LLP

Posted 2 years, 8 months ago by Rahul Rai

No You can not Register LLP as a NDFC as ROC will not allow you to go for that.

if your more than 50% income come from interest then it is necessary to get licence under NBFC.

However interest earned on Bank Fixed Deposit can not included for Interest criteria.

So you May plan accordingly or you may go for the Co op Soc.

Regards,

CA HARDIK V SHAH

Posted 2 years, 8 months ago by HARDIK SHAH

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