mumbai reliance realty part of the anil ambani group is knocking on the doors of rich investors for raising a real estate fund that will have the innovative structure of a limited liability partnership llp with investors as partners a hybrid of a company and partnership the new structure will be free of dividend distribution tax and minimum alternative tax mat market circles said the move could encourage more funds to come out with llp structures because there is no regulatory cap on the number of partners that an lpp can have llps which are comparatively less regulated offer a lot of scope for innovation we may see new fund offerings in different llp forms because of the benefits said arun gupta partner corporate professionals advocates solicitors he said such structures are possible in sectors like real estate gold and other commodities but not in securities because llps are barred by the central bank from carrying out investments in securities the internationally followed taxefficient structure which was introduced in 2008 is aimed at making life easier for small businesses and professional outfits like law and audit firms but llps are slowly become a taxsaving instrument for the promoters a large number of promoters of toplisted entities have converted their holding firms into llps to save tax and smoothen succession planning ril was among the first to rejig its promoters shareholding by transferring 33 stake valued at around 1 lakh crore from promoter group entities to llps over the years government and regulators have brought several changes to make the llp route less attractive to business houses possibly sensing the tax loss it could cause for instance in several cases companies have been told to obtain a noobjection certificate from rbi foreign direct investment is often subject to clearance from the foreign investment promotion board and an alternate minimum tax amt has been introduced there is a real benefit from the clause in the llp act that puts no limit on the number of partners but innovative structures could also draw the attention of regulators like rbi the incometax department and sebi they may be perceived to bypass provisions of collective investment scheme said gupta reliance realty is the managing partner of reliance realty llp it will manage the activities of reliance realty llp and its business on behalf of all the partners this shall involve both a projectspecific role and an administrative role said a note circulated to prospective investors reliance capital asset management pms a subsidiary of reliance capital and also the investment manager to reliance mutual fund is the advisor to the realty fund the fund was launched a few weeks ago all profits and losses would be shared in a ratio as set out in the partnership agreements and all partners have similar rights reliance realty llp has an independent governance committee the provisions pertaining to exit mechanism forms an important part of the partnership agreement the said exit mechanism not only facilitates an exit for