Amarchand Mangaldas is planning to convert to a limited liability partnership (LLP) once the structure is finalised and has been sanctioned by the Bar Council of India.
Amarchand co-managing partner Shardul Shroff (pictured) told Legally India that he would like the firm to become an LLP when the regulatory details are clear.
Shroff predicted: "As soon as there is clarity from the professional bodies and the taxation principles applicable, several Indian professional firms would shift to the LLP / LLC model as it supports the younger generation of partners and gives them immunity of limited liability for the fault of other partners of the firm."
He added that an LLP or limited liability company (LLC) structure would also make it considerably easier to manage a large firm.
"This is a step in the right direction as it enables larger agglomeration of professionals without being constrained by the 20 partner limit under the Indian Partnership Act 1932," he said.
Amarchand currently has a total 43 partners but operates as three separate partnerships for the purposes of keeping within the limit.
The Limited Liabilities Partnership Act was passed in late 2008 and is hoped to enable Indian law firms to grow and compete more fairly with foreign firms if liberalisation takes place.
How an LLP will be treated for tax purposes has not yet been decided. But Shroff and observers expect that the issue will be addressed in the upcoming Finance Bill and 6 July 2009 budget announcement.
A main question concerns whether an LLP will be tax transparent or whether the corporate entity is taxed in addition to its individual partners.
Shroff commented that the LLP structure was a welcome step in the globalisation of India and added that LLPs would also drive the development of insurance principles of the professional liability of partnerships.
Currently India has no requirement for law firms to be insured and no firms are commonly known to have taken out professional liability insurance.
An LLP is an independent corporate entity where the liability of its individual partners is limited.
On the other hand, LLPs also impose additional principles of transparency, including the auditing and public disclosure of firms' financial accounts.
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www.livemint.com/2008/03/17002646/Stung-firms-want-banks-to-pay.html?pg=3
I wonder if Shardul has checked with Cyril before making this statement.
The firm has provided the following statement for publication and has asked us to remove the original comment for legal reasons.
"The anonymous source quoted on your site obviously has not read the retraction of the MINT, as written above and as enclosed. [http://tinyurl.com/nj45fc]
The comment posted on your website in the context of LLP's is irrelevant, cowardly and incorrect.
After our assignments for the privatization of the New Delhi and Mumbai airports were over, the joint venture in which the AAI has 26% shareholding appointed us to advise the joint venture for third party contracts.
We do not advise / have not advised any bidder vis-à-vis AAI for the privatization of Delhi / Mumbai airports and we have not taken up any adversarial position to AAI, which appointed us.
The allegations of any professional mis-conduct is malicious and without any regard to the truth. The MINT which carried the original allegation on the 25th of October has withdrawn it on 2nd November, 2007 after reading the truth and facts."
Success brings its critics. Let me say this... despite being viewed as a family run firm, Amarchands has always raised the bar in the legal profession... whether it is the quality of their advice (which at times is erratic) or the manner in which they have glam'd up law firms in India... they were the first to move into mega offices.. first to hire external consultants to advise them on globalisation... first to restructure their partnership... and perhaps now first (or second) to become an LLP.
I for one hope they do... we will finally know how much they all earn!!
Best
An Amarchand Watcher
1. The AMSS reply maintains that Mint retracted its story, but makes no mention of the Indian Express story. Why?
2. Is it becuase Mint is owned by the Hindustan Times Group, which is a long standing client of AMSS?
There is more to this than meets the eye. It is foolish to take away the original comment, which I was surprised to me and even more suprised when it was taken out. At least the comment with the Indian Express link should be allowed to be displayed.
One topic which needs a debate is the non-solicit entered into by the big few in India.
Whilst mere non-solicit by itself would not be a concern, the scope of the non-solicit (as I understand) between the big few is shocking. I understand that when an applicant from one of the big firms applies, the new firm discloses the name of the applicant and the fact of the application to the applicant's current firm. This form of cartels is, in my opinion, unethical and may need an examination by the regulator.
Perhaps it is time to have a more open debate on this issue.
Lawyer
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