What is CTE (Consent to Establish)?
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| Gender | Male |
|---|---|
| Industry | Law |
| Occupation | Legal Compliance |
| Location | G 10, Sector 63, Noida, utter Pradesh, India |
| Links | Audio Clip, Wishlist |
| Introduction | The AIF Regulations permits the formation of an AIF as a trust, a limited liability partnership (“LLP”), or a corporation. As a result, in addition to the AIF Regulations, the AIF registration will be subject to the following, depending on the type of establishment: a. The provisions of the Indian Trusts Act, 1882 (“Trusts Act”) apply to private trusts; b. The Limited Liability Partnership Act, 2008 (“LLP Act”) applies to LLPs; and c. The Businesses Act, 2013 (“Companies Act”) applies to companies. |
| Interests | Registration Of Alternative investment funds ("AIFs") is regulated in India by the Securities and Exchange Board of India ("SEBI"), the country's securities market regulator, in accordance with the provisions of SEBI (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations") and various notifications issued thereunder from time to time. |
| Favorite movies | 11. Please explain how investors' liability is limited in different legal structures and fund types (e.g., PE funds and LPACs). Because an AIF might be set up in a variety of legal structures, the governing legislation of those legal structures will be crucial in establishing the scope of an investor's liability: a) Company: According to the Companies Act, a shareholder's obligation is restricted to the amount of unpaid share capital. |
| Favorite music | b) LLP: Under the LLP Act, a partner's liability for the LLP's debts and obligations is limited to the unpaid capital it has promised to provide to the LLP in accordance with the LLP agreement's conditions. c) Trust: There is no legislative restriction on the liability of a trust beneficiary, and any limitations would be contractually agreed upon with the beneficiary. While certain statutory restrictions of liability apply to corporations and limited liability partnerships, the typical practise among AIFs is to limit the liability of any investor to the amount of the investor's capital commitment or distributions received from the AIF. Members of LPACs have no fiduciary responsibility to the AIF's investors and are given contractual safeguards to that effect in the AIF documents. |
| Favorite books | 12. What are the most common legal structures utilised by Alternative Investment Fund managers and advisers? The most common legal arrangements for AIF managers are LLPs and corporations. The following is a generalised outline of significant considerations to consider while determining which structure to pursue: a. Limited Liability Partnerships (LLPs): Distributions are not taxed in the hands of the partners; higher tax rate compared to a Company; may be chosen where the Manager's stakeholders seek to extract accrued profits on a regular basis because money received by an LLP's partners is tax-free in their hands. b. Companies: Relatively greater compliance requirements; lower corporation tax rate than an LLP; may be desirable where the Manager's stakeholders do not want to extract accrued income/dividends on a regular basis because the dividend is taxable in the hands of recipient shareholders. |
You're going to the moon! What did you forget to pack?
What are the most common legal structures utilised by Alternative Investment Fund managers and advisers?