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J J Irani Committee
Dr. J.J. Irani Committee was appointed vide Notification F. No. 1/1/2004-CL-V dated 4th August 2004. It also examined the issue of Limited Liability Partnership and made the following recommendations:
Limited Liability Partnership (LLP)
In view of the potential for growth of the service sector ,requirement of providing flexibility to small enterprises to participate in joint ventures and agreements that enable them to access technology and bring together business synergies and to face the increasing global competition enabled through WTO , etc. ,the for formation ofLimited Liability Partnerships (LLPs) should be encouraged .
It would be a suitable vehicle for partnerships among professionals who are already regulated such as Company Secretaries, Chartered Accountants, Cost Accountants, Lawyers, Architects, Engineers, and Doctors etc. However, it may also be considered for small enterprises not seeking access to capital markets through listing on the stock exchange.
We recommend that a separate Act be brought about to facilitate Limited Liability Partnerships. The concept need not be addressed in Companies Act.
Framework for small enterprises
The committee recognized that the Indian economy is yet in its growing phase . The number of companies being set up will increase over a period of time as new business opportunities emerge and new technological frontiers are scaled. Many new companies will be set up as small companies who will grow big in the future . It is clear that the small companies would contribute significantly to Indian economy. Because of their size , they cannot be burdened with same level of compliance requirements as , say , the large public listed companies .The small companies have to be enabled to take quick decisions , be adaptable and nimble in the changing economic environment , yet be encouraged to comply with essential requirements of the law through low cost of compliance . The Government may prescribe special regime for such companies through a system of exemptions.