FDI

• LLPs set to be allowed w.e.f 01.04.2009
• Limited Liability Partnerships, is the format that will allow professionals, traders and even producers of goods to conduct their business without worrying about losing their personal assets due to lapses of other partners.
  
• An LLP would be taxed for its income while the income of individual partners would be tax free; a benefit that is not available to companies. Companies pay tax on their profits and again pay dividend distribution tax when they distribute profits among shareholders. The LLP format protects partners from double taxation.
  

Change of rules regarding computing foreign investment in Indian companies makes compliant companies violators of FDI norms

• The government announced new rules for calculating the FDI in a corporate entity.
• Now, FII holdings, ADRs/GDRs, NRI investment and foreign investment through foreign currency convertible bonds would all be included while calculating FDI levels of Indian companies. These instruments were not part of the FDI calculation till now. An announcement specifying the compliance period is expected within a week. The current proposal is to fix August 31 as the last date for compliance with the new FDI norms, and the final deadline would be finalised after inter-ministerial consultations.