The Karnataka State Chartered Accountants Association (KSCAA), on 5th September 2023 had sought Clarification on admission of Indian Trusts as Partners in Limited Liability Partnership Firms from the Ministry of Finance and Corporate Affairs. CA Sujatha, the President of KSCAA, CA Sunil Bhandary, Secretary, CA Babitha G., Chairperson, Representation committee and CA Naveen S. Hedge Chairperson, Corporate and Allied Laws Committee were entrusted with the representation.
The clarification sought pertains to whether a trust which is not registered under SEBI regulations can be admitted as a partner in an LLP through its trustee, who may be an individual or a body corporate. To provide context, the KSCAA summarised the current provisions of the LLP Act as follows:
As per Section 2(1)(q) in conjunction Section 5 Of the LLP Act, a valid partner in an LLP must be either an ‘individual or a ‘body corporate.’
The Ministry of Corporate Affairs, Government of India, has previously issued Circular No. 37/2014 dated October 14, 2014, clarifying that a trustee representing a trust registered with the Securities and Exchange Board of India (SEBI), whether as a Real Estate Investment Trust or an Infrastructure Trust or in any other capacity, may be admitted as a partner in an LLP in the trustees’ name without the addition of the statement that it is a trustee, provided that the trustee is a body corporate.
The KSCAA in its letter states that “Given the aforementioned context, the members of Karnataka State Chartered Accountants Association, on behalf if the entire Chartered Accountants community and also on behalf of the trade and industry the state of Karnataka appeal to your good selves to kindly consider our above request. We respectfully request that a similar clarification be issued for the admission of trusts not registered under SEBI regulations. This would enable trusts to become partners in an LLP through their trustees, Whether such trustees are individuals or body corporates.”
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