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Global tax norms for limited liability partnership firms mooted

Special Correspondent

Recodification of the law is in an advanced stage

PHOTO: KAMAL NARANG

UNLIMITED ENTERPRISE: Prem Chand Gupta (left), Minister for Company Affairs, with Lalit Bhasin, Chairman, Corporate Affairs Committee, PHDCCI, at a seminar on Limited Liability Partnerships in New Delhi on Saturday.

NEW DELHI: The Union Ministry of Company Affairs has suggested to the Finance Ministry that the tax structure for the proposed limited liability partnership (LLP) firms should be on a par with global standards.

Speaking at a seminar organised by the Punjab, Haryana and Delhi (PHD) Chamber of Commerce and Industry here on Saturday, the Minister for Company Affairs, Prem Chand Gupta, said: "We have suggested to the Finance Ministry that the taxation structure under `Limited Liability Partnership' should be as per the international norms.''

In December last, the Government had introduced the LLP Bill in Parliament which was subsequently referred to the Standing Committee concerned. According to the bill, LLP is an alternative form of corporate business that provides the benefit of limited liability of a company along with the flexibility of a partnership firm.

The proposed structure, Mr. Gupta said, was not restrictive to a particular class of business. "The proposed bill provides that the LLP structure is available for any enterprise which fulfils the requirement of the law. There is also a provision for conversion of partnership firms and unlisted companies into LLP,'' he said. As for the changes envisaged in the Companies Act, 1956, he said a re-codification of the law was at an advanced stage.

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