No Objection Certificate for conversion of Investment Company into LLP

The Limited Liability Partnership Act, 2008 (herein after called “Act”) has brought a new kind of business vehicle in the Country called LLP, allowing small business and entities to carry on business under a flexible business model. The Act is silent about Dividend Distribution Tax, Minimum Alternative Tax, allowing number of corporate houses to escape tax by converting their investment and holding companies (herein after called “Investment Company”) into LLP, which are spared of above mentioned tax incidence, resulting to pay higher payout as dividend to their promoters.
Further, at the time of conversion of Investment Company into LLP, Registrar of Companies ask for a “No Objection Certificate” form the Central Bank of India since the porposed LLP wold be dealing with investment activities. However, Reserve Bank of India is not willing to give NOC for the reason as these Investment Company would be out of the perview of supervision of RBI.
Adding to this, there is a need to amend the exixting Act in line with the requrirement of RBI. The Officials of RBI are in talk with Ministry of Corporate Affairs to arrive at a workable solution.
  • Bruce_9187

    Hello Mukesh Ji.
    I think u are doing a great job. i like ur article very much.

    I need a ur advice sir,
    I am a freelance web site desginer, i take cheques in my name but now i want to take them in my company name exdmedia. I dont have any account. I am plaining to open a sole proprietor current account in sbi bank. i work from home , i dont have any office. can i open a sole proprietor current account. and please tell me the doucment that i need and the tax slabe for this.