The Hindu Business Line : FICCI proposals to Ministry on limited liability partnerships law

THE Federation of Indian Chamber of Commerce and Industry has suggested some points to the Ministry of Company Affairs for setting up Limited Liability Partnerships (LLP) in the country.

The chamber said that it would be necessary to align LLP legislation with other economic legislation by making appropriate amendment and clarifications to Foreign Exchange Management Act and Foreign Direct Investment guidelines.

LLPs are an amalgam of partnership firms and companies where in they enjoy organisational flexibility of a partnership but have limited liability.

The chamber has suggested that, as an initial step, concept of small and medium sized LLPs should be introduced and relaxation provided from disclosure and filing requirements, from compliance with accounting and other standards by making suitable provisions in the LLP legislation. Gradually such relaxation can be extended to all LLPs to make the structure more attractive.

Though there should be a statutory and compulsory requirement to have at least one manager or general partner with unlimited liability, the liability of the LLP in no case should be extended to all partners, the chamber suggests.

The chamber has further suggested that three-fourth majority for major decisions, including venturing into new businesses, should, therefore, be the norm within a LLP.

It should also be clarified whether electronic records would be considered as proper books of account, says the chamber.

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