The government is set to introduce stringent solvency and auditing norms for limited liability partnerships (LLPs), which would increase the compliance burden for them but bring in more transparency to satisfy the regulatory concerns raised by the Reserve Bank of India. The government had allowed foreign direct investment (FDI) into LLPs almost a year back but the central bank is yet to notify it.
"The RBI had made it clear to us in our several correspondence that they have their reservations about the LLP Act," a senior official of the Corporate Affairs ministry told ET. "We have decided to tighten some crucial rules under the purview of the current Act to win confidence of investors and regulators," he said adding that the changes will make LLPs more competent and easier to monitor.
Source: Economic Times