Limited Liability Partnership (Amendment) Bill, 2021 was introduced in both houses of Parliament and the Union Cabinet gave its approval on 28th July, 2021 and received the approval of the President on 13th August, 2021 and became Limited Liability Partnership Act, 2021. The Amendment seeks to facilitate greater ease of living to law-abiding corporates and to decriminalize certain provisions of the Act.
|KEY FACETS OF AMENDMENTS|
|v||Introduction of Small Limited Liability Partnerships (LLPs);|
|v||De-criminalization of monetary penalties;|
|v||Accounting Standards for classes of LLPs;|
|v||Compounding of offence;|
|v||Establishment of Special Court for speedy trial of offences;|
|v||Establishment of the Appellate Tribunal;|
|v||Resident of India;|
|v||Names which are not allowed;|
|v||Change of name of Limited Liability Partnership;|
|v||Payment of additional fees;|
|v||Penalty on non-compliance of any order passed by Tribunal;|
|v||Adjudication of penalties;|
|v||Cognizance of offences;|
|v||Power to remove difficulties;|
♦ INTRODUCTION OF SMALL LLPs:
√ the contribution of which does not exceed twenty-five lakh rupees or such higher amount, not exceeding five crore rupees, as may be prescribed; AND
√ the turnover of which, as per the Statement of Accounts and Solvency for the immediately preceding financial year, does not exceed forty lakh rupees or such higher amount, not exceeding fifty crore rupees, as may be prescribed; OR
√ which meets such other requirements as may be prescribed and fulfils such terms and conditions as may be prescribed.
♦ DE-CRIMINALIZATION OF MONETARY PENALTIES:
♦ ACCOUNTING STANDARDS FOR CLASSES OF LLPs:
√ The Central Government may, in consultation with the National Financial Reporting Authority constituted under section 132 of the Companies Act, 2013,—
a. prescribe the standards of accounting; and
b. prescribe the standards of auditing
as recommended by the Institute of Chartered Accountants of India constituted under section 3 of the Chartered Accountants Act, 1949, for a class or classes of limited liability partnerships.
♦ COMPOUNDING OF OFFENCE:
√ The Regional Director or any other officer not below the rank of Regional Director authorized by the Central Government may compound any offence under this Act which is punishable with fine only;
√ The Regional Director or any other Officer can collect a sum from a person reasonably suspected of having committed the offence which may extend to the amount of the maximum fine provided for the offence but shall not be lower than the minimum amount provided for the offence. It is hereby clarified that any second or subsequent offence committed after the expiry of the period of three years from the date on which the offence was previously compounded, shall be deemed to be the first offence.
√ Every application for the compounding of an offence shall be made to the Registrar who shall forward the same, together with his comments thereon, to the Regional Director.
♦ ESTABLISHMENT OF SPECIAL COURT FOR SPEEDY TRIAL OF OFFENCES:
√ The Central Government may, for the purpose of providing speedy trial of offences under the Act, by notification, establish or designate as many Special Courts as may be necessary for such area or areas, as may be specified in the notification.
ESTABLISHMENT OF THE APPELLATE TRIBUNAL:
√ Any person aggrieved by an order of Tribunal may prefer an appeal to the Appellate Tribunal Provided that no appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.
√ Every appeal preferred under sub-section (2) shall be filed within a period of sixty days from the date on which the copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed.
√ The Appellate Tribunal may entertain an appeal after the expiry of the said period of sixty days, but within a further period of not exceeding sixty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the period so specified.
♦ RESIDENT OF INDIA:
♦ NAMES WHICH ARE NOT ALLOWED:
√ No limited liability partnership shall be registered by a name which, in the opinion of the Central Government is identical or too nearly resembles to that of any other limited liability partnership or a company or a registered trademark of any other person under the Trade Marks Act, 1999.
♦ CHANGE OF NAME OF LIMITED LIABILITY PARTNERSHIP:
√ In case of same name Central Government may direct to change the name within 3 months from the date of issue of such direction and the Proprietor of registered trademarks can make application within a period of three years from the date of incorporation or registration or change of name of the limited liability partnership under the LLP Act, 2008.
♦ REGISTRATION OFFICES:
√ For the purpose of exercising such powers and discharging such functions as are conferred on the Central Government by or under this Act or under rules made thereunder and for the purpose of registration of limited liability partnerships under this Act, the Central Government shall, by notification, establish such number of registration offices at such places as it thinks fit, specifying their jurisdiction.
√ The Central Government may appoint such Registrars, Additional Registrars, Joint Registrars, Deputy Registrars and Assistant Registrars as it considers necessary, for the registration of limited liability partnerships and discharge of various functions under the LLP Act, 2008.
PAYMENT OF ADDITIONAL FEES:
√ It shall be noted that different fees or additional fees may be prescribed for different classes of Limited Liability Partnerships or for different documents or returns required to be filed under the LLP Act, 2008 or Rules made thereunder.
♦ PENALTY ON NON-COMPLIANCE OF ANY ORDER PASSED BY TRIBUNAL:
♦ GENERAL PENALTIES:
√ If a Limited Liability Partnership or any Partner or any Designated Partner or any other person contravenes any of the provisions of the LLP Act, 2008 or the Rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the Limited Liability Partnership or any Partner or any Designated Partner or any other person, who is in the default, shall be liable to a penalty of five thousand rupees and in case of a continuing contravention with a further penalty of one hundred rupees for each day after the first during which such contravention continues, subject to a maximum of one lakh rupees.
♦ ADJUDICATION OF PENALTIES:
√ For the purposes of adjudging penalties under the LLP Act, 2008, the Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government, not below the rank of Registrar, as adjudicating officers in such manner as may be prescribed.
♦ COGNIZANCE OF OFFENCES:
√ No court, other than the Special Courts referred to in section 67A, shall take cognizance of any offence punishable under LLP Act, 2008 or the Rules made thereunder save on a complaint in writing made by the Registrar or by any officer not below the rank of Registrar duly authorized by the Central Government for this purpose.
♦ POWER TO REMOVE DIFFICULTIES:
√ Notwithstanding anything contained in sub-section (1), if any difficulty arises in giving effect to the provisions of this Act as amended by the Limited Liability Partnership (Amendment) Act, 2021, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act, as may appear to it to be necessary for removing the difficulty, provided that no such order shall be made under this section after the expiry of a period of three years from the date of commencement of the Limited Liability Partnership (Amendment) Act, 2021.”.
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