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This is an archive article published on July 11, 2011
LLPs8217; entry into stock exchanges OK8217;d
Bourses can now permit LLPs to be admitted as members and register them as stock brokers.
Capital market regulator Sebi today said Limited Liability Partnerships LLPs,a hybrid between a partnership firm and company,can get membership of stock exchanges.
Following requests from various stock exchanges to permit LLPs to be admitted as members to enable them to get registration as stock brokers,Sebi said 8220;stock exchanges may consider granting membership to LLPs8221;.
The Securities Contract Regulation Rules,1956 SCRR is only clear on Limited Liability Companies LLC and partnership firms being eligible to be admitted as members of stock exchanges.
Sebi said that in this context it may be stated that LLPs are akin to LLC and partnership firms.
It asked stock exchanges to make necessary clarificatory amendments to the relevant bye-laws,rules and regulations for the implementation of the decision.
The Parliament has put in place a legal framework for LLPs.
LLP is a corporate business vehicle that provides benefits of limited liability while allowing its members the flexibility of organising their internal structure as a partnership firm.
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As per the latest data,there were 5,501 registered LLPs in the country.
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