Table of Contents

Research Handbook on Partnerships, LLCs and Alternative Forms of Business Organizations

Research Handbook on Partnerships, LLCs and Alternative Forms of Business Organizations

Research Handbooks in Corporate Law and Governance series

Edited by Robert W. Hillman and Mark J. Loewenstein

Presenting alternatives to the corporate form of organization, the Handbook explores partnerships, LLCs, business trusts and other alternatives. Specially commissioned chapters by leading scholars in the field examine issues such as: fiduciary duties, agency principles, contractual freedom, tax treatment, the special circumstances of law firms, and dissolution. While much of the emphasis is on US law, a number of chapters include treatments of Japan, the UK, Russia, China, Taiwan, India and Brazil.

Chapter 25: The advent of the LLP in India

Afra Afsharipour

Subjects: law - academic, corporate law and governance

Extract

Around the world, unincorporated business associations have evolved to play a significant role in economic life. In the United States, for example, the limited liability company form is now often preferred by entrepreneurs and at times by even more established businesses. Countries around Europe have begun to introduce new forms of business associations to compete with the corporate form to better meet the needs of small and medium businesses and professional associations. Similarly, alternative entity forms have begun to make inroads in other parts of the world. In 2008, India, one of the world’s largest economies, passed a ground-breaking law to allow for the Limited Liability Partnership. The Indian LLP Act was the first major introduction of a new business form in India in over 50 years. While the partnership and corporate forms (i.e. companies under the Indian Companies Act) have long flourished in India, both forms have presented challenges for certain Indian businesses. For example, as the Indian government recently noted in a 2014 report, about 95 percent of firms in India are micro, small and medium enterprises, but less than 2 percent of these firms are corporations given the high compliance costs associated with the Indian Companies Act. Like India’s other business and financial law reform efforts in the 1990s and 2000s, the introduction of the LLP form is tied to India’s rapid economic growth in the 1990s.

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