Q.44(2) : Networth for Partnership Firm – please help us to understand the networth requirement for Partnership Firm as Registered RIA.

Response : 

According to Section 8 of the IA Regulations A  Non- Individual RIA need to maintain Networth of 50 Lakhs Rupees.

“Networth” means in your case of Partnership firm:

• the aggregate value of paid up share capital
• plus free reserves (excluding reserves created out of revaluation)
• reduced by the aggregate value of accumulated losses, deferred expenditure not written off, including miscellaneous expenses not written off, and
• reduced by net worth requirement for other services offered by the advisers in accordance with the applicable rules and regulations.

The existing investment advisers as on September 30, 2020 shall comply with the Networth requirement within 3 years i.e. September 30, 2023.

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