Legal Question in Business Law in Rhode Island

To enter Partnership business in USA by an Indian

Sir, We are 4 partners interested to form a partnership business in US. Our business will be sale of Home furnishing through online marketing. We will be procuring Home furnishing items from India. One of us is an American citizen and all other 3 are Indian citizen. Is it possible to form a partnernship company in US by us? If so do the 3 Indian partners have to be physically present in US for signing the deed? The American Citizen is in Rhode Island and the other 3 partners are based in India. Please let us know whether there is any way to enter into partnership without moving to US by the 3 Indians. That is by remaining in India itself is it possible to form partnership with an american citizen. Thanking you, Yours Sincerely.


Asked on 6/30/05, 10:22 pm

4 Answers from Attorneys
Nand Kishore NK Associates

Re: To enter Partnership business in USA by an Indian

Setting up partnership in US would entail investment by the three Indian individuals. As per Regulation 5 of the Foreign Exchange Management (Transfer or isue of any foreign security) Regulations, 2000, individual residents are prohibited from making direct investment outside India. Thus formation of partnership in US may not be advisable.

However, the three Indian partners may form a Registered Partnership firm in India and thereafter form a JV with the fourth US resident partner. Investment by a registered partnership firm in JV abroad is allowed subject to prior permission of RBI as per Regulation 17A of the abovementioned Regulations.

Once the above JV is formed the three Indian partners may operate remaining in India.

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Answered on 7/01/05, 4:31 am
Raja Selvam Selvam & Selvam, Advocates & Consultants

Re: To enter Partnership business in USA by an Indian

Sir

its not necessary for you to be physically present there. Only the consensus of the partners are necessary.

Even an Email contract is valid if there is consensus between the partners.

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Answered on 6/30/05, 11:15 pm
Jayesh Desai Jayesh Desai

Re: To enter Partnership business in USA by an Indian

Under US law your presence is not necessary - But you must obtain permission from RBI under FEMA, before commencing such activity.

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Answered on 6/30/05, 11:20 pm
Vivek Anand M/S.VIVEK ASSOCIATES

Re: To enter Partnership business in USA by an Indian

The physical presence of the Partners in US are not necessary under the present Laws, however, the Resident Indian Partners have to obtain a specific permission to enter into a Contract in US.

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Answered on 7/02/05, 6:13 am


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