The Companies Commission of Malaysia has introduced a new business vehicle called the limited liability partnership (LLP) as an alternative for businessmen to conduct business.
The Limited Liability Partnership Bill 2011, passed by Dewan Negara yesterday and slated for implementation mid-next year, will allow the public more options to choose their nature of business vehicle, either in the form of a company, sole proprietorship or partnership firm.
In a statement, the commission said the LLP would combine the characteristics of a company and partnership firm but provide the protection of a limited liability for its partners.
Domestic Trade, Cooperative and Consumerism Datuk Seri Ismail Sabri Yaakob was quoted as saying in the statement that the initiative taken by the ministry, through the commission, was to enable the country become more competitive in line with the government's call to simplify procedures, reduce business administrative cost and compliance requirements for the business community.
"It is timely for the business community to be given the option of a business vehicle which would offer flexibility in terms of its formation, maintenance and termination," he said.
While saying that the LPP would have the necessary dynamics, Ismail Sabri added that the LLP would complement the traditional choice of sole proprietorships, partnerships or companies which would provide businessmen and investors the flexibility and the freedom to select the best business model that suited their needs and requirements.
"The LLP concept will also support new businesses, small-and-medium enterprises and professionals to grow their businesses without having to worry too much about their personal liabilities, assets and strict compliance requirements", he added.
As of November, there were 964,612 companies and 4,623,513 sole proprietorship and firms registered with the commission.
Professional accounting, audit and law firms are expected to convert their mode of business into a limited liability partnership, following the introduction of the new business vehicle.
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