Khaitan & Co and Trilegal have taken the first formal steps towards becoming limited liability partnerships (LLP) by registering their LLP names.

The Ministry of Corporate Affairs has approved both firms' requests to use the names Khaitan & Co LLP and Trilegal LLP on 8 July and 29 June of this year respectively.

It is understood that both firms would like to incorporate as LLPs as soon as practicable and all the implications are clear.

Trilegal co-founding partner Anand Prasad confirmed the plans and added: "I think that almost everybody is waiting for clarity on tax issues. Once people do that they will move to an LLP structure."

"Right now we have not yet done a complete analysis. We need to figure out how to implement it."

Although this year's Union Budget clarified LLP's tax positions some question marks still remained.

Khaitan & Co partner Rabindra Jhunjhunwala said the main attractions in becoming an LLP lay in becoming a single partnership larger than 20 partners and in limiting liability of the partners.

Khaitan & Co currently has 34 equity partners and Trilegal has 15 of whom seven are equity partners.

Prasad said that LLP's partner number advantage was less important as Trilegal still had "enough headroom".

Both partners agreed that LLP's partnership number benefits were also less relevant as the proposed Companies Act 2009 is set to raise the 20 partner limit to 100.

Anand said that he believed Bar Council of India approval to convert to an LLP ownership structure was not necessary.

LLPs will also increase transparency by requiring the partnerships to publish their accounts.

The next stage for Khaitan & Co and Trilegal will be to submit Form 2 under the LLP rules to incorporate the entity.

Checks with the Ministry of Corporate Affairs reveal that Amarchand Mangaldas, AZB & Partners, FoxMandal Little, J Sagar Associates (JSA), Luthra & Luthra and other large firms have not yet registered an LLP name.