ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Tuesday approved the draft Limited Liability Partnership Bill 2015 (LLP) and forwarded it to the finance division.

The proposed law provides a new form of business structure, which would fill the gap between business firms such as sole proprietorships/partnerships, the liability of whose partners is unlimited, and the companies governed under the Companies Ordinance 1984, whose members enjoy the benefits of limited liability.

The LLP provides an alternative form of business organisation, which has the flexibility of a general partnership and would avail all the advantages of a limited liability company. Besides, the right of a partner to a share of the profits are transferrable either wholly or in part.

However, the transfer of any such rights will not cause dissolution of the LLP. The draft also provides the conversion of firms (including private companies) into LLPs.

The LLPs would be taxed as a partnership, but will have the benefits of being a corporate, or more significantly, a separate juristic entity having perpetual succession but distinct from its partners.