The Senate Committee on Finance and Revenue on Thursday approved the Limited Liability Partnership (LLP) Bill 2017. The long-standing benefit of this bill would be seen in the face of more opportunities for entrepreneurs with limited capital.
The new bill provides a new internationally accepted business structure will help the small business owners and entrepreneurs by filling the gaps between the firms with a sole proprietorship, a partnership between investors who have unlimited liability and the companies with limited liability that are being governed under Companies Ordinance, 1984.
Advantages for Entrepreneurs
According to the LLP bill, entrepreneurs will get the following advantages:
- LLPs will be taxed as a partnership
- Unlike partnership, LLP will be a separate juristic entity
- There won’t be any detailed legal and procedural requirements for LLP intended for large widely held companies
- LLP doesn’t have any requirements of minimum capital contribution
- Public and private firms can also convert into an LLP firm
According to Zafar Hijazi, Chairman Securities and Exchange Commission of Pakistan (SECP), small businesses are in need of framework which can provide the flexibility that will suit the requirements of small and medium enterprises and the service sector in particular.
He added; “The main advantage of the LLP for business is that it will not require complex legal and procedural requirements suitable for large and widely held companies.”
Pakistan has been fast-tracking its way to entrepreneurship, where many of the young minds are looking to create their own startups. Pakistan now even has an MBA in Innovation, Technology & Entrepreneurship (EMBITE), offered by ITU. Such a bill may yet prove to be invaluable asset for the entrepreneurs.