SERVICES

Formation and Conversion of Partnerships, LLPs, Companies (For-Profit, as well as Non-Profit)

A company or a firm can convert into a Limited Liability Partnership by the provisions of Section-55 of the LLP Act, 2008.

Partnership firms nowadays are at a disadvantage compared to the newly introduced Limited Liability Partnership (LLP) as they do not provide limited liability protection for the partners, separate legal entity status, ability to take on an unlimited number of partners, and smooth transfer of ownership. It is one of the most chosen forms of partnership formation for small and medium-sized businesses.

On conversion, this is one of the major requirements of Partnership into LLP is that the LLP formed from the Partnership has the same Partners as the original Partnership. The LLP formed cannot have new or fewer Partners than the Partnership firm. Therefore, if any Partners are to be added to the LLP, the Partnership should first be converted into an LLP and then Partners must be added to the newly formed LLP. On the other hand, if Partners are to be removed, it is advised to remove them before starting the process for the conversion of Partnership into LLP.

India Entry Strategy, Inbound and Outbound Investments

The Indian regulations allow outbound investments from India into overseas companies, branch offices, joint ventures, etc. Business houses based in India who are interested in or aiming to set-up shops or offices abroad or getting listed on the overseas bourses, also need to understand and stride through a relationship of cross-border taxes and regulatory challenges.

Our key service offerings are:

Advice on international investment strategies and suggestions for obtaining optimal ownership/jurisdiction structures for investment into a particular jurisdiction which includes setting up an international holding company, global sales company, etc.

Advice and assistance on entity structuring, capital structuring, and regulatory approval processes in the selected jurisdiction.

Assistance in finalizing/review of shareholders, joint ventures, and other relevant business agreements from a tax perspective.

Identifying and enhancing tax and fiscal incentives, including obtaining tax rulings in the selected jurisdiction.

Advice on the tax credit claim in India and tax treaty implications

Assistance in obtaining approvals from the Reserve Bank of India/regulatory authorities that may be required in the matter.

Due Diligence

Due diligence is an investigation, audit, or review performed to confirm the facts of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party.

Due diligence is performed by companies considering acquiring other companies as well as by equity research analysts, fund managers, broker-dealers, and individual investors.

Due diligence by individual investors is voluntary. However, broker-dealers are legally obligated to conduct due diligence on security before selling it.

Assistance in Compliance under various Laws & Regulations

By the laws and regulations of company formation or conversion, a well-informed person must handle the process. All the rules should be followed carefully to avoid any challenges.

Business/Capital Restructuring Advice

There could be many reasons that may motivate the need for financial restructurings, such as financial difficulty when the company is under debt or faced a breach.

In such situations, stakeholders try to protect their position and provide a stable platform for the company. We combine strategic financial advice and deep sector knowledge with the foresight that comes from experience. We help you create a plan of action for the pre and post-financial restructuring process, and a contingency plan as well. We give strategic financial advice for fast decision making, assessing short-term liquidity requirements, and consider actions to quickly preserve value.

We conduct a detailed analysis based on an independent business review and cash flow forecast of the company. We identify appropriate debt restructuring options in terms of value for the different stakeholders, arranging and achieving financial close involving all the different stakeholders. We also take a leading financial advisory role, with a deep knowledge of the different pre-insolvency legislations to help the agreement take place.

FEMA and RBI Compliance on FDI and ODI

For a country where capital is not readily available, Foreign Direct Investment (FDI) has been an important source of funds for companies. Under FDI, overseas money, either by an individual or entity, is invested in an Indian company.

In India, Foreign Direct Investment policy is regulated under the Foreign Exchange Management Act, 1999 governed by the Reserve Bank of India. According to the Organization for Economic Co-operation and Development (OECD), an investment of 10% or above from overseas is considered as FDI.

FEMA has acted as an important source for the growth and development of various sectors in India. The main aim of FEMA is to facilitate external trade, balance payments, promote orderly development, and maintain the foreign exchange market in India. Below is the list of important compliance to be followed under the provisions of FEMA:

• Annual Return on Foreign Liabilities and Assets
• Annual Performance Report (APR)
• External Commercial Borrowings
• Single Master Form (w.e.f. 30.06.2018)
• Advance Reporting Form (ARF)
• Form FC-GPR
• Form FC-TRS
• Form ODI

Bankruptcy, Insolvency, Dissolution/Liquidation Proceedings

Bankruptcy is seen as the last option, and it’s mostly processed to deal with the debt which cannot be repaid. Becoming bankrupt or filing for bankruptcy means you declare by law to state that you will be unable to repay your debts. Most of your debts could be eliminated in this way, and debt collectors and creditors will stop contacting you.

Once the proceedings begin to file your bankruptcy, a registered trustee takes control of most of your finances and tries to pay off your debts. They have the power to sell your assets and to take any income earned over a certain limit.

Bankruptcy lasts for three years. During this time, a company will have limits on what they can do, such as restrictions on running companies and work in certain professions. Bankruptcy is recorded on your credit report for up to seven years and the National Personal Insolvency Index permanently. And since it can have serious implications for your financial future, you should consider bankruptcy only if you have no other better option.

Liquidation on the other hand is different. Liquidation applies only to companies. If your company is unable to pay its debts and goes into liquidation, a liquidator is appointed and the business ceases operations. Typically, company assets are sold or realized to repay debts. Once that’s done, the company is shut down. Liquidation can be voluntary or involuntary. It can be ordered by a court or initiated by creditors or members. Liquidation could be initiated if the company wants to end its operations. The outcomes are typically the same for both types of liquidation, but they differ in the way they proceed.