LLP (Third Amendment) Rules 2023: Register of Partners & Beneficial Interest

The Limited Liability Partnership (Third Amendment) Rules, 2023 were published in Official Gazette on 27th October, 2023 (date of enforcement of the amendment). The brief of the amendment is as follows

♦ Register of Partners – Form 4A

Every LLP shall, from the date of its incorporation, or within 30 days from the commencement of these rules maintain a register of its partners in Form 4A which shall be kept at the registered office of the LLP.

Particulars to be entered in Form 4A:

1. name of the partner; address (registered office address in case the member is a body corporate); e-mail address; Permanent Account Number or Corporate Identification Number; Unique Identification Number, if any; father or mother or spouse’s name; occupation; status; Nationality; name and address of nominee;

2. date of becoming partner;

3. date of cessation;

4. amount and nature of contribution (indicating tangible, intangible, movable, immovable or other benefit to the limited liability partnership, including money, promissory notes, other agreements to contribute cash or property, and contracts for services performed or to be performed) with monetary value; and

5. any other interest, if any.

Entries in the register shall be made within 7 days pursuant to any change made in the contribution amount, or in name and details of the partners in the Limited Liability Partnership agreement, or in cases of cessation of partnership interest.

♦ Declaration in respect of beneficial interest in any contribution – Form 4B/ Form 4C/Form 4D

The Registered Partner: Person whose name is entered in the register of partners of an LLP but does not hold any beneficial interest fully or partly in contribution.

The Registered Partner shall file to LLP Form 4B within a period of 30 days from the date on which his name is entered in the register and in case of any change occurs, a fresh Form 4B is required to be filed within 30 days of such change.

The Beneficial Partner: Person who holds or acquires a beneficial interest in contribution of an LLP but his name is not registered in the register of partners.

The Beneficial Partner shall file a declaration to LLP disclosing his/her interest in Form 4C within a period of 30 days after acquiring such beneficial interest in the contribution of the LLP and in case of any change occurs, a fresh Form 4B is required to be filed within 30 days of such change.

LLP shall record such declaration in the register of partners (Form 4A) and shall file, within a period of 30 days from the date of receipt of declaration by it, a return in Form 4D to the Registrar.

♦ Designation of a Person Responsible

Every LLP to designate a partner who shall be responsible for furnishing and extending co-operation for providing, information with respect to beneficial interest in contribution in LLP to the Registrar or any other officer authorized by the Central Government and shall file information of such designated partner with the Registrar in Form 4 (Notice of appointment, cessation, change in name/ address/designation of a designated partner or partner and consent to become a partner/designated partner/declaration of designated partner with respect to beneficial interest).

If not specified, every designated partner shall be deemed to be responsible for the above.

Here’s a summary of the above:

Conclusion:

The LLP (Third Amendment) Rules, 2023, mark a significant step in enhancing compliance and transparency within LLPs in India. By maintaining a Register of Partners and implementing declaration requirements for beneficial interests, these rules aim to ensure that all information is readily available and that stakeholders are aware of who holds what interest in the LLP. Designating a responsible partner for information disclosure further reinforces compliance and regulatory standards within the LLP landscape. Compliance with these rules is essential for LLPs to operate in line with legal requirements and maintain transparency.