New Delhi, Aug 4 (IANS): The Rajya Sabha on Wednesday cleared the 'Limited Liability Partnership Amendment Bill' that aims to accelerate the 'Ease Of Doing Business' campaign of the government and brings regulations for this segment at par with other large companies.
The bill was earlier cleared by the Lok Sabha. So, with Parliamentary approval now, it will become law after Presidential assent.
This the first amendment to LLP legislation since its enactment in 2008. It largely supports the growing startup ecosystem where companies are flourishing.
The new amended legislation has decriminalised 12 offences for LLPs, and three sections of earlier laws have been omitted.
To support growth of the LLP a new definition of small LLP has been introduced that had raised individual or partner contribution levels from present Rs 25 lakh to Rs 5 crore. Also, the turnover limit to be in the LLP set up has also been raised from Rs 40 lakh to Rs 50 crore.
Finance minister Nirmala Sitharaman had earlier said that the amendments would bring the LLPs on an equal playing field, compared to large companies which come under the 'Companies Act'.
Experts and industry stakeholders have lauded the changes in LLP Act and said that decision is a major development towards ease of doing business.
"Amendment in LLP act proposes to now remove the criminality angle in respect of violations and will now only entail pecuniary penalty by way of a fine with no criminal action. This will facilitate the middle-level entrepreneur in their business activities and growth," said Jyoti Prakash Gadia, Managing Director, Resurgent India.
Describing the changes as welcome move, Sijo Kuruvilla George, Executive Director at ADIF said that it is founder-friendly development.
The amendment will make Limited Liability Partnerships an even more attractive vehicle and Indian a more sought-after destination, he said.
The move will help simplify the life of founders and exudes confidence in the government's intent towards bringing about real of ease of doing business."