LLP

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This discussion explores whether a Limited Liability Partnership (LLP) can be used for financing or loan-giving businesses. While an expert advised forming an LLP, current RBI regulations for Non-Banking Financial Companies (NBFCs) primarily cover companies registered under the Companies Act, not LLPs. This has led to reluctance from the RBI regarding investment holding LLPs, prompting many to consider LLPs as investment-cum-operating entities instead.

sanjay

sanjay (Querist)
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22 March 2021 Hello All
Pl guide if we make LLP firm then can we do business of financing or loan giving business.
Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 March 2021 Better to go for private limited company.

sanjay

sanjay (Querist)
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23 March 2021 Why Sir. Pl guide. Any expert has advised me to make LLP.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 September 2021 Currently, the definition of NBFC under the RBI Act does not specifically cover LLPs. Only companies registered under the Companies Act can form NBFCs.

The RBI has been reluctant to grant no objection to investment holding LLPs which has prompted many promoters to set up LLPs as investment-cum-operating entities.

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