I need to know whether a partnership firm incorporated in india can make the payment for the purchase shares of indian company,on behalf of Non resident who is one of the partner of the Firm. Shares will be owned in the name of NR partner. Firm want to make the payement only. Is it permissible ? Please reply as soon as possible on urgent need.
10 August 2011
Yes Firm can make payment on behalf of NR upto the extent of balance outstanding in his account in the books of partnership firm.
However the better course of action shall be to transfer the funds in NRO account and then purchase the shares of Indian Company.
Also I hope the NR Partner must have got permission from RBI to become a partner in India as per the provisions of Foreign Exchange Management(Investment in Firm or Proprietary Concern in India) Regulations ,2000.[I presume here NR is an Non Resident as per FEMA and is not of Indian Origin]
CAclubindia
