Govt all set to notify Limited Liability Partnership bill

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New Delhi , Mar 13 (UNI) The KPMG's and the McKinsey's of the world will soon have competition from their Indian counterparts as the government is all set to notify the Limited Liability Partnership Bill, 2006 which will provide greater flexibility to entrepreneurs and professionals.

''The bill has been vetted by the Law Ministry, passed by the Parliament, gone through the scrutiny of the Standing Committee and accepted comments from the public. It is all set to be notified soon,'' said Ministry of Corporate Affairs Joint Secretary Jitesh Khosla.

Limited liability partnership concept was introduced in order to adopt a corporate form, which combines the organisational flexibility and tax status of partnership with advantage of limited liability for its partners. LLP is a body corporate formed and incorporated under the LLP Act, which is a distinct legal entity separate from that of its partners.

Introducing LLPs, as a new business structure would fill the gap between business firms such as sole proprietorship and partnership, which are generally unregulated and Limited Liability Companies, which are governed by the Companies Act, 1956.

''There are some taxation issues still pending and once that is sorted out, the bill will be ready for notification,'' said Mr Khosla.

It will be a big boost for entrepreneurs, scientist and the likes of all professional people. This might also promote venture capitalism and provide a shot in the arm for the economy, he added.

At present, this LLP bill is in the form of mini companies act.

The Liability of the partners incurred in the normal course of business is that of LLP and it does not extend to the personal assets of the partners.

This is a great relief to the partners, particularly professionals like Company Secretaries, Chartered Accountants, Cost Accountants, Advocates and other professionals. These professionals may also form multi-disciplinary LLPs to meet the changing economic environment.

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