New Delhi, Oct 24 (UNI) The Rajya Sabha today passed a Limited Liability Partnership (LLP) Bill that can provide an impetus to professional expertise and enterpreneurial driven initiatives as an alternative to traditional partnership firms that entails a burden of unlimited personal liability.
Piloting the Bill, Minister of State for Company Affairs said, with the growth of national economy, the role played by enterpreneurs as well as technical and professional manpower is acknowledged internationally but the partnership laws since it entailed unlimited liability was a hindering factor. The LLP would give a boost to professional expertise. The LLP is an alternative corporate business offering flexibility of organising their internal structure as partnership based on mutual agreement.
The LLP format would enable the professionals and enterprises providing services of any kind or engaged in scientific technical disciplines to form commercially effiecnt vehicles suited to their requirements. Owing to flexibility in structure and operaitons, the LLPs would be suitalbe for SMEs and investement by venture capital, he said.
Replying to debate on the Bill, the Minister disagreed with Mr S S Ahluwalia that the Indian enterpreneurs would be at a disadvantage because Indian technocrats and professionals were equally competent and capable and the LLP would allow them to grow at the global level.
Explaining the safety nets provided in the Bill, he said every LLP should have at least two partners and at least two individuals as designated partners one of whom should be resident of India. The duties and obligations of the designated partners should be provided in the law. The Centre will have powers to investigate the affairs of an LLP if required by appointing competent inspector for the purpose.
The Bill had provided for the LLP to be a separate legal entity with the liablity of partners being limited to agreed contribution in the LLP which may be tangible or intangible in nature. No parnters would be liable on account of independent or unauthorised actions of other partners or misconduct. Liabilities of the LLP and partners who are found to have acted with an intent to defraud creditors or any other fraudulant purpose shall be unlimited or any debts or other liabilities of the LLP, he said.
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