MCA UPDATES RELATING TO LLP

• WEB BASED LLP FILLING

The Ministry of Corporate Affairs has launched a new way of e-filing for LLP on MCA21 portal. All LLP filings going forward will be web based.

• LLP (AMENDMENT) ACT 2021

LLP Amendment Act 2021 is meant to support the ‘ease of doing business’ initiative, by extending a helping hand for the Start-up India community, as the amendments provide for decriminalizing certain offences, introducing the concept of small LLPs, appointment of adjudicating officers/ special courts, etc. This will help the small business houses to do their business by incorporating LLPs without fear of prosecution, reduced compliances and their costs etc.

Section 1 to 29 of LLP (Amendment) Act 2021 shall be applicable from 01.04.2022

Key Amendments

Introduction of Small Limited Liability Partnership

“Small Limited Liability Partnership” means a Limited Liability Partnership
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

OR  which meets such other requirements as may be prescribed and fulfills such terms and conditions as may be prescribed.

RESIDENT OF INDIA:

 The LLP (Amendment) Act, 2021 amended the Section 7(1) of the LLP Act, 2008 by substituting the words “eighty-two days during the immediately preceding one year” by “twenty days during the financial year”. Therefore, a person who is resident in India for just 20 days in financial year can be appointed as Designated Partner.

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.

CHANGE OF NAME OF LIMITED LIABILITY PARTNERSHIP:

A limited liability partnership, is registered by a name which is identical with or too nearly resembles to that of any other limited liability partnership or a company; or a registered trade mark of such proprietor the Central Government may direct that such limited liability partnership to change its name or new name within a period of three months from the date of issue of such direction:

If the limited liability partnership is in default the Central Government shall allot a new name to the limited liability partnership which the limited liability partnership shall use thereafter:

COMPOUNDING OF OFFENCE:

The Regional Director or any other officer not below the rank of Regional Director authorised by the Central Government may compound any offence under this Act which is punishable with fine only.

A sum 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 Etc.

ESTABLISHMENT OF SPECIAL COURT FOR SPEEDY TRIAL OF OFFENCES:

The Central Government may, for the purpose of providing speedy trial of offences under this Act, by notification, establish or designate as many Special Courts etc.

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.

 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 for which no penalty or punishment is provided elsewhere in this Act, the 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.:

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

The Central Government shall, while appointing adjudicating officers, specify their jurisdiction in the order ETC

POWER TO REMOVE DIFFICULTIES:

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, within three years from the date of commencement of the Limited Liability Partnership (Amendment) Act, 2021.

JURISDICTION OF COURTS:

The Special Court referred to in clause (a) of sub-section (2) of section 67A shall have jurisdiction and power to impose punishment. The criminal cases pending before the court of Judicial Magistrate of the first class or Metropolitan Magistrate, as the case may be, shall be transferred to the Special Court

COGNIZANCE OF OFFENCES

No court, other than the Special Courts referred to in section 67A, shall take cognizance of any offence punishable under this Act 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 authorised by the Central Government for this purpose.

DE-CRIMINALIZATION OF MONETARY PENALTIES: The overall number of criminal provisions under the LLP Act, 2008 will be reduced and number of offences are decriminalized under LLP Act, 2008