Limited Liability Partnerships - Emerging Business Vehicles of Growth for India Inc,

Abstract

World War II (1940-44) led to emergence of two distinct political & economic blocs of countries. WhileNATO bloc countries, led by USA, pursued capitalism i.e. free market system; Warsaw bloc countries, ledby then USSR (Soviet Russia), pursued socialism i.e. state-controlled market system. Decade of 1980ssaw economic & political collapse of Warsaw bloc; and emergence of USA as sole political & economicsuper power. The message was clear that States cannot and are not supposed to run the business. Itwould be better that States confine themselves to regulatory and supportive role; and running of businessshould be largely left to private sector. Next decade i.e.199os had been witness to big winds of changeacross the world . The world is becoming a small global village. The fast-changing, increasingly int er-connected, globalized and ever-increasing competitive environment is creating the necessity for exploringnew ways of doing business. As a result, Limited Liability Partnership (LLP) business entity have beenintroduced & encouraged by many countries during the last 10-15 years. This paper examines the needfo r LL Ps in India. The paper also explores the salient features of LLP legislation in India and benefits ofdoing business through LLP business structure. The paper emphasizes the likely contribution of LLPbusiness format to growth of small and medium scale enterprises and growth of India In,c. as a whole.