Background
There were practically no amendments passed under the Limited Liability Partnership (LLP) Act, 2008 until now. The Government of India recently introduced a new Limited Liability Partnership (Amendment) Bill, 2021, to amend the LLP Act 2008.
The Rajya Sabha passed the Limited Liability Partnership (Amendment) Bill on 4 August 2021 and on 10 August 2021, Lok Sabha passed the Bill.
These amendments are made to boost further the ease of doing business, reduce penalties for various offences, compounding offences stipulated in the Act of 2008.
Key Amendments
- Small LLP - A new concept of small LLP is introduced.
"Small Limited Liability Partnership" means a limited liability partnership-
- the contribution of which, does not exceed twenty-five lakh rupees (Rs. 25,00,000/-) 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 (Rs. 40,00,000/-) 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.
- Accounting and auditing standards: (Section
34A) - This is New Section inserted after Section 34 - Section 34A
The Central Government may, in consultation with the National
Financial Reporting Authority constituted under section 132 of the
Companies Act, 2013 -
- prescribe the standards of accounting; and
- 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.".
- Special Courts
There is a provision for the establishment of Special Courts for the speedy trial of offences under the Act. These special courts will follow the conditions laid down for sessions judges and Additional Sessions for the offences punishable with the imprisonment of three years or more and Metropolitan Magistrate or a Judicial Magistrate for other offences. The order of the Adjudicating Authority of this court can be challenged and appealed for in the High Court.
- General Penalties: (Section 74) - This Section fully substituted.
If a limited liability partnership or any partner or any designated partner or any other person contravenes any of the provisions of this Act 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.
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