Friday, June 14, 2013

NBFCs not to be Partners in Partnership Firms - Clarifications

NBFCs were advised vide CC No. 214/03.02.002/2010-11 dated March 30, 2011 that they are prohibited from contributing capital to any partnership firm or to be partners in partnership firms. In cases of existing partnerships, NBFCs were advised to seek early retirement from the partnership firms. RBI has further extended the scope of this ban vide its notification no. clarification RBI/2012-13/526 DNBS.PD/CC.No. 328/03.02.002/2012-13 dated June 11, 2013 by including the following :


a.       Partnership firms mentioned above will also include Limited Liability Partnerships (LLPs).
b.      Further, the aforesaid prohibition will also be applicable with respect to Association of persons; these being similar in nature to partnership firms.

These entities has been further advised that those

Non-Banking Financial Companies which had already contributed to the capital of a LLP/Association of persons or was a partner of a LLP/Association of persons are advised to seek early retirement from the LLP/Association of persons.


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