Flexibility of OperationsThe LLP structure provides a lot of flexibility to the partners with respect to complying withstatutory norms. For example, since LLPs are governed by the LLP Agreement, it is possiblefor the LLPs to provide suitable clauses in such agreement to fix the time limits for theduration of the LLP in the LLP Agreement. In such cases, after realisation of the objectives ofthe venture, the LLP could either be wound up, or the provisions for striking-off of the nameof the LLPs can be used, instead of the winding up provisions.36One of most beneficial aspect of the LLP structure is that mandatory auditing of the LLP isnot required if the turnover of the LLP does not exceed forty lakh rupees in a financial year orwhose contribution does not exceed twenty five lakhs rupees. However, even wheremandatory audit of the accounts of the LLP is not required, the partners can optionally chooseto get the accounts of the LLP audited.Foreign Nationals and LLPsForeign nationals including foreign companies and LLPs can incorporate LLPs in India,subject to compliance with foreign exchange laws. The latest development in this regard isthat the Government of India has decided to permit FDI in LLP firms, subject to specifiedconditions.37This provision is a laudable initiative to attract foreign direct investment andprovide opportunities to global business concerns to conduct flourishing business activities inIndia, consequently enabling India’s economy and GDP to reap its benefits.38
307However, there is a flip side to this coin. The confusing part is that FDI in LLPs will beallowed only for LLPs operating in sectors/activities where 100% FDI is allowed, throughthe automatic route and there are no FDI-linked performance related conditions (such as ‘NonBanking Finance Companies’ or ‘Development of Townships, Housing, Built-upinfrastructure and Construction-development projects’ etc.).39However, despite the restrictions on FDI in LLPs,this move by the Government to introduceFDI in LLPs will boost the number of joint ventures in the country and specifically ininfrastructure sector, where most of projects till date are executed in form of unincorporatedjoint venture where most.40NOTES:4.Waxman Scottetal, Delaware Limited Liability Partnerships. available at,(Last Visited on August 15, 2013).5.RSHIP-ANEWBUSINESSMODEL.pdf, (Last Visited on July 1, 2013).6.Id.7.“Limited Liability Partnerships And Other Hybrid Business Entities” report ofALBERTA LAW8.REFORM INSTITUTE EDMONTON, ALBERTA available atprejury.law.ualberta.ca/alri/docs/ip004.pdf, (Last Visited on July 1, 2013).