New Delhi: Industry chamber CII has said the Limited Liability Partnership (LLP) Bill 2006 which was introduced in Parliament last session is a step in the right direction by entrepreneurs, professionals and enterprises providing services.

"LLP is an alternative business vehicle that provides the benefits of limited liability and also allows its members the flexibility of organising their internal structure as a partnership based on a mutually arrived agreement," CII said in a statement.

The proposed Bill does not restrict the benefit of LLP structure to certain classes of professionals only but will be available for use by any enterprise that fulfils the requirements of this Act.

As per the Bill, LLP would be a corporate body and a legal entity separate from its partners.

It would have perpetual succession and the Indian Partnership Act would not be applicable to LLPs. However, other entities may convert themselves to LLP in accordance with the proposed legislation.

Currently in India, the small businesses operate as Private Limited companies or Sole proprietors or partnerships. Each of these is subject to different regulatory and tax regimes reflecting their organisation and ownership.

Such structure is available in countries like UK, the US, Australia, Singapore, etc. And the LLP Bill 2006 is broadly based on the UK and Singapore LLP Acts.