New Delhi, Jul 28 (IANS): With the Union Cabinet approving amendments to the Limited Liability Partnership Act, experts and industry stakeholders have lauded the move 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," Resurgent India Managing Director Jyoti Prakash Gadia said.
Describing the decision as welcome move, ADIF Executive Director Sijo Kuruvilla George said that it is founder-friendly development.
The amendment will make LLPs an even more attractive vehicle and India 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."
The Union Cabinet on Wednesday cleared the Limited Liability Partnership Amendment Bill to accelerate the Ease Of Doing Business campaign of the government.
According to Finance Minister Nirmala Sitharaman, changes are being made in the Companies Act, decriminalising many sections and improving the Ease Of Doing Business for companies.
"A similar treatment had to be given for LLPs," she said.
Accordingly, a total of 12 offences are to be decriminalised for LLPs, and three sections will be omitted.
These amendments, she said, will bring the LLPs on an equal playing field, compared to large companies which come under the Companies Act.
The definition of LLP is also being changed and accordingly individual contribution level of partners being raised from Rs 25 lakh to Rs 5 crore and turnover from Rs 40 lakh to Rs 50 crore.