Corporate amendment bill likely to provide tax relief to Category III AIFs
To be sure, AIFs can choose to incorporate as LLPs even now. However, many have opted against this route because most AIFs in India are structured as trusts, a model that is generally considered more investor-friendly. Moreover, investors value confidentiality, which could be compromised under the LLP structure, where partners’ identities must be publicly disclosed.
The move to LLP for lower taxation comes at the cost of investor confidentiality.
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