ICSI told to suggest changes in LLP Structure:

The
Ministry of Corporate Affairs has asked the Institute of Company Secretaries of
India (ICSI) to suggest changes to make the limited liability partnership (LLP)
model more suitable for the small and medium sector enterprises in the country.

Converting to an LLP structure will also help SME units get easier access to
credit from banks, the official said. LLP’s registrations were opened in April
last year but the response has been very poor, with only 677 entities being
registered till date. The official further points out that the present number
mainly comprises big consulting groups and law firms, with a relatively small
portion of small-sized entities and new entrants showing interest. “This (LLP
form of business) is a fantastic new opportunity and will inevitably give a
whole new profile to the MSME sector.

It will
be possible for the sector to reach out to venture capital. This can be the
stepping stone for partners becoming much larger industrialists and logging
bigger growth,” Minister for Corporate Affairs Salman Khurshid had earlier said,
on the advantages for SMEs to leverage out from the LLP model. The report of the
task force on SMEs, which was recently presented to Prime Minister Manmohan
Singh, had highlighted the need for giving wide publicity to the LLP model,
which it said will provide SMEs an interim solution to move from the informal to
the formal economy.

(Source:
The Economic
Times dated 06.02.2009)