One of our readers wrote to us with this query:
Dear Team Cafemutual,
We have been running distribution business through an individual ARN. Now, we want to form an LLP. We would like to understand couple of things:
Can we name our company as Vbuildwealth. Is it in compliance with SEBI/AMFI norms?
What is the procedure that need to be followed to float an LLP?
We currently manage AUM of Rs.200 crore in mutual funds.
Prabhu, Chennai
Dear Prabhu,
I hope you and your family are healthy and safe!
Good to know that you have decided to form an LLP and make your practice institutional.
The chosen name VBuildWealth may not be a problem and you can go ahead with the name. However, it is better to obtain NOC from AMFI before applying for the new name.
MFDs having LLP and private limited companies will have to obtain no objection certificate (NOC) for the new company name. You can send an email to contact@amfiindia.com mentioning ‘Request for NOC for submission to ROC’ in the subject line and send ARN, existing name, proposed name, designation and mobile number of authorized person from their registered email id.
Based on our understanding, MFDs entity name should not reflect or create an impression that they perform a role of IFA/adviser/wealth manager. Simply put, you will have clearly mention that you are acting as a MFD and dealing with distribution of mutual funds.
In addition, while you can use words like wealth and investment on standalone basis, you cannot use these words in combination like wealth manager and investment management. For instance, they cannot name their company as ABC Wealth Management but they can name it as ABC Wealth.
Here is the step-by-step process to change nomenclature:
- Pass the resolution to finalize the new name
- Apply for name reservation by filing LLP RUN on MCA portal and get approval or reservation for the new name
- LLP needs to file e-form 5 for notice of any change in name with ROC within 30 days of approval of name
- Once you get the approval, you will have to execute supplementary agreement to give effect to the changes in the LLP agreement within 30 days in e-form 3
Other important compliance
- Intimate government authorities like GST, incorporate changes in income tax Pan and TAN, shops and establishment department, AMFI, professional tax, bank account and AMCs
- Incorporate changes in letterheads, logo, visiting cards, stationary, rubber stamps, website, social media handles and signature line used in communication
- Carry a tagline ‘AMFI registered Mutual Fund Distributor’ along with your name or company name across all communication
Hope we were able to resolve your query. You can write to us for clarity or simply call @7303903692.
Regards,
Team Cafemutual
