Right Legal Structure for AIF Registration in India
Choosing the right legal structure is a crucial step for Alternative Investment Fund registration in India. As per the Securities and Exchange Board of India (SEBI) regulations, an AIF must be established as a trust, a limited liability partnership (LLP), or a company. However, the trust structure is the most commonly preferred and widely accepted by SEBI due to its simplicity, flexibility in fund management, and favorable tax treatment.
It is typically set up through a registered trust deed with a trustee and a sponsor. LLPs and companies can also be used, but they involve more regulatory compliance and less tax efficiency compared to trusts. The chosen structure must align with the fund’s investment strategy, investor expectations, and long-term goals.
Moreover, the entity must be registered with SEBI as an AIF under Category I, II, or III, depending on the investment focus. Selecting the appropriate legal structure ensures regulatory compliance, operational ease, and investor confidence, all of which are critical for successful fund management and growth in India’s evolving alternative investment landscape.
