ISLAMABAD: The Secur­ities and Exchange Com­mission of Pakistan (SECP) is introducing the concept of lim­­ited liability partnership (LLP) in Pakistan in collaboration with other stakeholders.

Initially, the SECP has approved a concept paper in this regard, which has been placed on its website to help raise awareness and solicit public and stakeholders’ comments.

An LLP is a partnership in which some or all partners have limited liabilities, which means that one partner is not responsible or liable for another partner’s misconduct or negligence.

Know more: SECP to introduce investor protection product

Introducing LLP as a new business structure will fill the gap between business firms — such as sole proprietorships and partnerships, which are generally unregulated — and limited liability companies that are governed by the Companies Ordin­ance, 1984.

In addition to an alternative business structure, LLP would act as a step towards documentation of the economy and will convert an informal, unregistered, and unregulated sector into a formal and regulated regime.

Published in Dawn, August 29th, 2014