NATURE OF LIMITED LIABILITY PARTNERSHIP (LLP) 1. Concept of “limited liability partnership” LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.

The government may soon allow foreigners to set up limited liability partnerships in sectors where 100% foreign investment is allowed, taking a decisive step after much flip-flop over funding guidelines for this form of business organisation, favoured globally for its flexibility.

I have taken on rent particular premises. Later I entered into a partnership. The firm so formed is carrying on its business on the premises taken on rent by me. Does it amount to subletting? A. It does not amount to sub letting. When a person after taking premises on rent, enters into partnership firm to carry business, it did not amount to sub letting because the premises continues to remain in possession of the tenant.

The ICAI is pleased to note that its suggestion relating to exemption of capital gains in the hands of shareholders consequent to conversion of a company into a LLP, has found favour with the Government. It is also heartening to note that one out of the three amendments made while passing the Finance Bill, 2010 was in accordance with the suggestion given in the Post-Budget Memorandum, 2010 submitted by the Direct Taxes Committee of ICAI. One of the other two proposals is an extension of relief granted unilaterally by the Honourable Finance Minister.

Form 11 is made available at http://llp.gov.in. All LLPs whose financial year closes on 31st March of every year has to file Form 11 within 60 days from the date of financial year closure without any late fee and later it attracts additional fees @ of Rs. 100/- per day of delay. This financial year (closed on 31/03/2010), the due date falls on 30/05/2010.

Form 11 is made available at http://llp.gov.in. All LLPs whose financial year closes on 31st March of every year has to file Form 11 within 60 days from the date of financial year closure without any late fee and later it attracts late fee at the rate of Rs. 100/- per day. The due date falls on 30/05/2010.

Government on 28.04.2010 introduced in the Rajya Sabha three bills to enable CAs, Company Secretaries and Cost Accountants to form limited liability partnership firms in line with global practices.

Limited liability partnership (LLP), the new business vehicle that the government introduced a year ago, is moving from one hurdle to another. While Budget 2010-11 has cleared the way for small companies to convert into LLPs through capital gains tax waiver, the commerce and industry ministry is now having second thoughts on allowing FDI in LLPs.

The Ministry of Corporate Affairs has specified five new categories of professions that are eligible for forming firms under the new limited liability partnership Act. Already approved by the Cabinet, these professions are over and above the earlier categories of chartered accountants, cost accountants and company secretaries to form LLP firms.

The government is set to introduce Bills to amend existing laws governing chartered accountants, cost accountants and company secretaries in the current Budget session, a senior government official said. The proposed amendments will allow registration of large size consultancy firms in India.