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Can a foreigner be a partner in newly constituting firm.

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Sarath kumar.M

CA Final Student

62 Points Posted on 22 July 2023

Hello All,

One of my clients isinterested in setting up a partnership firm for some business in service sector. He wanted to know whether his counterpart in UK who is a British Citizen can be a partner in this firm. I am a bit confused. So thought of asking the experts' panel. Could any one throw some light into this, please?

Replies (2)

Quick Summary

This discussion explores whether a foreign national, specifically a British citizen, can be a partner in a newly formed partnership firm in India. Generally, foreigners require specific permission under the Foreign Exchange Management Act (FEMA) to conduct business in India. The Indian Partnership Act 1932 also outlines certain individuals, such as minors, those of unsound mind, or insolvent individuals, who are ineligible to be partners.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212556 Points Posted on 23 July 2023

According to the Indian Partnership Act 1932, the following individuals cannot be partners in a partnership firm in India:

Minors (individuals under the age of 18)
Persons of unsound mind
Insolvent individuals
Individuals who have been disqualified by law from entering into a partnership
Foreigners are not authorized to do business in India unless the partnership is specifically permitted by the Foreign Exchange Management Act (FEMA).
Companies or other legal entities cannot enter into a partnership by their governing documents.