Mandeep S. Virdi (Sr. Executive Legal) 24 April 2014

Property and power of attorney

24.04.2014

A Individual (resident to USA - Indian Origin) and his Sister (resident of USA - Indian origin) and his Brother (born and brought up in India), intends to enter into Partnership for Leasing plot of Land in Mumbai, India, on which construction would be carried out by third party.

They (Individual, Sister and Brother) intend to give rights of one of the Commercial Shop as shall be constructed on the said land to an such a person who would run an Commercial Undertaking (say cake shop / chemist shop etc) from such Commercial Shop.

My Query is :

1. Can any such Partnership take place. If yes, can the Partnership Deed be drafted in India, where the Brother who is in India may sign and send the same to such Individual and his Sister who would respectively sign in USA, which would further be certified by Indian Consulate in USA. Post that the same be registered here in India.

2. Can the Individual (who is in USA) / Sister of Individual (who in USA) give and Power of Attorney to any person in India (who he /she feels can work for and on his behalf) for execution of the Lease and/or any further documents related to the said transactions.

3. Can the Sister (who is in USA) give power to his Brother (who is India and who wold be one of the Partner of the Proposed Partnership Deed).

4. What is the nature of the POA, Is it Principle to Principle or is it Agent to Agent? Would the Power of Attorney be held liable for any of the acts, which it would conduct for and on behalf of the Original Power giver.

Thanks and Regards,

Mandeep Virdi

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1 Replies

bhagwat patil (Property due diligence 9422773303) 25 April 2014

Yes.provided you have to care of RBI guideline .....

	Restrictions on investment in a firm or a proprietary concern in India by a person resident outside India

	Save as otherwise provided in the Act or rules or regulations made or directions or orders issued thereunder, no person resident outside India shall make any investment by way of contribution to the capital of a firm or a proprietary concern or any association of persons in India ;

	Provided that the Reserve Bank may, on an application made to it, permit a person resident outside India subject to such terms and conditions as may be considered necessary to make an investment by way of contribution to the capital of a firm or a proprietary concern or any association of persons in India.

	Permission for investment in certain cases

	A non-resident Indian or a Person of Indian Origin resident outside India may invest by way of contribution to the capital of a firm or a proprietary concern in India, provided that -

	a)	the amount invested is received either by inward remittance through normal banking channels or out of an account maintained with an authorised dealer/authorised bank by the non-resident Indian or the person of Indian origin in accordance with the relevant Regulations;

	b)	the firm or the proprietary concern is not engaged in any agricultural/plantation activity or real estate business, i.e. dealing in land and immovable property with a view to earning profit or earning income therefrom;

	c)	the amount invested shall not be eligible for repatriation outside India;

	d)	where investment is made out of NRSR account of the non-resident investor, the income earned on investment or proceeds of investment shall be credited only to the NRSR account of the investor.

	Permission to a firm or a proprietary concern to make payment to a non-resident Indian or a person of Indian origin who has made investment

	A firm or a proprietary concern in India may make payment to or for the credit of a nonresident Indian or a person of Indian origin the sum invested by such person in that firm or the proprietary concern or the income accruing to such person by way of profit on such investment.