TagPartnerships

CA firms with LLPs can now act as statutory auditors

(The following post is contributed by Rohan Bagai) A limited liability partnership (LLP) of chartered accountants (CAs) can now act as a statutory auditor of a company notwithstanding Section 226 (3) (a) of the Companies Act, 1956, which stipulates that a ‘body corporate’ is disqualified from such an appointment. In this regard, the Ministry of Corporate Affairs (MCA) has recently issued a...

Government Nod to FDI in LLPs

(The following post is contributed by Rohan Bagai) The Cabinet Committee on Economic Affairs (CCEA) recently approved foreign direct investment (FDI) in limited liability partnership (LLP) firms whilst setting out a few disclaimers in its press release dated May 11, 2011. This follows from a consultation process initiated last year pursuant to a discussion paper. As such, an LLP is a crossbreed...

More Hurdles for LLPs

As we have previously noted on this Blog, the popularity of limited liability partnerships (LLPs) has not met with expectations since introduction of that business vehicle in April 2009. While the Government has taken certain steps to boost the utility of LLPs, such as by considering the possibility of foreign investment into LLPs discussed in this paper issued by the Department of Industrial...

Proposal for FDI in Limited Liability Partnerships

Limited liability partnerships (LLPs), which are a relatively novel concept to India, have been recognised since April 1, 2009. LLPs are different from general partnerships in several ways, but there are two prominent differences. First, partners in LLPs carry limited liability for acts of the firm. Second, the partnership firm possesses separate legal personality and to that extent it has...

MCA 2009

The previous post highlighted some of the key developments in corporate law and related aspects last year. Since then, I came across a year-end review published by the Ministry of Corporate Affairs (MCA) that details the progress it made last year. While there have been several steps towards easing the procedures for doing business, the Ministry also had to deal with the crisis emanating from...

An Analysis of the LLP Act

A paper titled The Indian LLP Law: Some Concerns for Lawyers and CAs by Amit M. Sachdeva and Sachin Sachdeva has been posted on SSRN. Here is the extract: With a view to giving the entrepreneurs the necessary regulatory support, India enacted its first law on limited liability partnerships in December 2008, after almost two years of debate. An LLP, as a hybrid business form, coalesces the...

Possible Delay in LLP Tax Clarification

Although the Limited Liability Partnership Act came into effect on April 1, 2009, it appears that only about 38 limited liability partnerships (LLPs) have registered themselves under this new legislation. One of the key shortcomings of the existing regime is the lack of clarity on taxation of LLPs as the Income Tax Act does not deal with such a business entity. Although it was earlier expected...

Partnerships and the Effects of Non-Registration: Section 69(2A) declared unconstitutional

In a judgment delivered last week, V. Subramanium v. R. Rao (Civil Appeal 7438/2000; MANU/SC/0417/2009), the Supreme Court declared unconstitutional a significant state amendment to the Partnership Act, 1932. Section 69 of the Partnership Act reads: 69. Effect of non-registration. (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by...

Imminent Developments in Competition Law

Guest contributor R.V. Anuradha points to a news report indicating that the long-awaited Competition Commission of India (CII) would be functional on April 1, 2009. This will replace the existing Monopolies and Restrictive Trade Practices Commission (MRTPC) signifying an important step in Indian competition law. As the news report states, that day will also mark another milestone, which is the...

LLP Bill Passed in Parliament

Media reports (here and here) indicate that the Limited Liability Partnership Bill, 2008 has been passed by Parliament. It was passed in the Lok Sabha on December 12, 2008, while the Rajya Sabha had already approved the Bill on October 24, 2008. The Ministry of Company Affairs has also published on its website two sets of draft rules relating to LLP for comments from the public: 1. The Limited...

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