ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved the draft Limited Liability Partnership Bill, 2015 (LLP) on Tuesday after consultation with stakeholders and relevant parties as reported by Media and Corporate Communications Department of SECP.
At first stage, law has been approved by the SECP and for the approval of the Finance Division for further process, it has been sent accordingly. The purpose of this new bill is to introduce a new business structure with the aim of filing the gap between business firms such as sole proprietorships and partnerships – the liability of whose partners is unlimited according to Companies Ordinance, 1984 and those companies whose members enjoys the benefit of limited liability.
The LLP will bring opportunities for small and medium enterprises, firms of chartered accountants and legal practitioners, etc. to increase their global competitiveness and convert the firms into a new form of business.
If the proposed LLP Bill 2015 get passed, it will provide a new form of business organization, where there will be flexibility in the partnership as the partnership will enjoy the benefits of limited liability company although it was registered as a partnership firm.
Following proposals are also included in the draft:
1. Partner right to share its profits either wholly or in part that was not previously transferable
2. Partner right to transfer the share will not result in dissolution of LLP.
3. The conversion of firms to LLP and conversion of private companies into LLPs.
4. Taxation status of the LLP will be as a partnership but will enjoy the benefits of corporate or separate legal entity having perpetual succession but distinct from its partners.