On Thursday, the Senate Committee on Finance and Revenue approved the Limited Liability Partnership (LLP) Bill 2017. The long term benefit of this bill is that it will provide business opportunities for entrepreneurs with low capital. Senator Saleem Mandviwala acted as the Chairman of the committee.
Purpose of the bill
The new bill will help entrepreneurs eliminate the gaps between companies allowing sole proprietorship by providing them globally recognized business system. Sole proprietorship is a partnership formed by investor with unlimited liability and limited liability companies governed under Companies Ordinance, 1984.
Benefits of the bill
The benefits provided to entrepreneurs as per the Limited Liability Partnership bill are as following:
- Partnership tax will be imposed on LLPs
- LLP will be formed as a separate juristic body
- LLP for big corporations will not require any legal or procedural condition
- There is no extent of minimum capital contribution in LLP
- Public and private sector firms can also join into an LLP company
According to the Chairman of Securities and Exchange Commission of Pakistan (SECP), Zafar Hijazi, small companies need an adaptable structure that will fulfill the necessities of small and medium ventures and particularly the service sector.
He further added that the service sector plays a major role in the growth of national economy. Moreover, he also said that an increased diversity can be seen in the existing variety of service.
Additionally, he stated:
“The main advantage of the Limited Liability Partnership for business is that it will not require complex legal and procedural requirements suitable for large and widely held companies”
The scope of entrepreneurship is increasing with a rapid pace in Pakistan. Here majority of the young talents are looking forward to establish their own startup companies. This kind of bill may yet stand out to be a vital resource for the entrepreneurs of the country.