The government may exempt partnership firms and limited companies from paying stamp duty while converting into limited liability partnerships (LLPs), a way of doing business that is favoured globally for its flexibility. The government will amend the Income Tax Act later this year to provide a tax regime for LLPs, which are being incorporated from the beginning of this month, a finance ministry official said. In an LLP, one partner or shareholder will not be held liable for the slips or wrongdoing of another. Besides, partners will have the freedom to decide the internal structure of an LLP, unlike in the case of companies that have a board of directors and need to follow procedures set by the law.
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