India’s government is mulling changes in the LLP Act and related rules to strengthen home-grown accounting firms. The idea is to encourage mergers and growth that will allow the formation of large domestic audit companies that would be the competition to the Big Four international firms.
The LLP Act was enacted in India in 2008 and is based on the UK’s 2000 legislation and provides the operations flexibility of a partnership while having the protection of limited liability. It protects partners’ individual assets from business risks while offering transparency through the filing of annual returns and compliance laws. Particularly popular among professionals like lawyers or accountants, LLPs allow members to run the business while not giving up on their protection wall.
These proposed reforms are expected to be included as part of The Ministry of Corporate Affairs’ 100-day action plan. Proposed changes in the LLP Act, together with the Companies Act, are likely to be tabled during the winter session of the Parliament in December this year. It is expected that these changes will develop a stronger domestic accounting sector in India to compete at the international level firms.
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