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BY Avid Legal
In recent times, Limited Liability Partnership (LLP) has became a popular form of business entity in India that offers the benefits of both partnerships and limited liability companies along with flexibility and ease of compliance. Thus, due to aforesaid character of LLP, this form of business model is being highly chosen by small and medium-sized enterprises (SMEs), professional firms, consultancy services and others. While LLPs can engage in almost all the business activities, they are subject to restrictions and compliance requirements when it comes to engaging in financial activities such as banking, investment, insurance, and asset management. However, these activities are regulated by various statutes, including the Reserve Bank of India Act, 1934, the Securities and Exchange Board of India Act, 1992, and the Insurance Regulatory and Development Authority Act, 1999. LLPs offer several advantages to businesses and investors in India, there are also restrictions that apply to them. These restrictions can impact the ability of businesses to attract investment and grow, and compliance with regulatory requirements is crucial for the smooth operation of an LLP. It is essential for businesses and investors to understand the restrictions on LLPs in India and to comply with the regulatory framework governing their activities. This issue aims to provide an overview of LLPs' engagement in financial activities under the laws of India. It discusses the legal framework governing LLPs' financial activities and the compliance requirements for LLPs engaged in financial activities. It also highlights the recent developments and reforms in the financial regulatory framework in India and their impact on LLPs' financial activities.
Arbitration