THE LIMITED LIABILITY PARTNERSHIP (AMENDMENT) ACT, 2021
Journey of the act:
LLP(Amendments) 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 become Limited liability partnership act, 2021.
This act shall be applicable from 1st April 2022.
Overview:
The latest amendments to the LLP Act largely focus on the ease of doing business for various LLPs. The introduction of Small LLPs together with decriminalization of offences is likely to attract investors and allow flexibility in working. The establishment of special courts and appointment of adjudicating officers is a step towards fast disposal of trials in an efficient manner.
Section wise analysis of amendments and additions.
| SR.NO | CHAPTER, SECTION | AMENDMENTS & Additions |
| 1. | CHAPTER I, Section 2(1) (ta)
Small LLPs |
Contribution > 25 Lakh rupees or such higher amount, not exceeding 5 crore rupees, as may be prescribed: and
the turnover > 40 lakh rupees or such higher amount, not exceeding 50 crore rupees, as may be prescribed. |
| 2.
|
CHAPTER II, Section 7
Definition of resident for designated partner. |
Definition of resident has been amended from 182 days to 120 days. |
| 3.
|
CHAPTER II, Section10(1)
Punishment for contravention of section 7 (Designated partners) & Section 9(change in designated partner) |
Amended the punishment having effect as under:
Penalty- Rs 10,000 and in case of continuing contravention further penalty of Rs 100 for each day till contravention continues, subject to maximum penalty of- Rs 1,00,000 for LLP & Rs 50,000 for every partner of such LLP. |
|
4 |
CHAPTER II, Section10(2) Punishment for contravention of sub-section (4) of section 7(consent to act as designated partner)
|
Penalty for LLP and every Designated partner of Rs 5000 and in case of continuing contravention, further penalty of Rs 100 for each day till contravention continues, subject to maximum penalty of – Rs 50,000-for LLPs & Rs 25,000-for its every designated partner. |
| 5 | CHAPTER II, Section10(3)
Punishment for Contravention of sub-section (5) of section 7(DP to satisfy the prescribed condition) or section 9(change in designated partner) |
Penalty for LLP and every Designated partner of Rs 10,000 and in case of continuing contravention, further penalty of Rs 100 for each day, subject to maximum penalty of –
Rs 100,000-for LLPs & Rs 50,000-for its every designated partner |
| 6 | CHAPTER III, Sec 13(4)
Registered office of LLP and change therein-
|
Amended the punishment from fine to penalty.
Penalty for LLP and every partner, of RS 500 for each day during which the default continues, subject to a maximum of – RS 50,000 for the limited liability partnership and its every partner |
| 7 | CHAPTER III, section 15(2)(b)
Name.
|
Clause substituted-Removed “trademark which is subject matter of application for registration”
No Name of LLP shall be: “(b) 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 Trademarks Act, 1999.” |
| 8 | CHAPTER III, section 17
1. Rectification of name of limited liability partnership.
|
Substitution of new section for section 17 having effect as under:
If name of any LLP is similar to that of existing LLP or registered trademark, then such LLP or trademark owner shall make application to Central government within 3years of incorporation or registration of that LLP.
Then CG directs to change the name and that LLP must change its name within 3 months from such direction.
After change in name, LLP has to give notice of such change to Registrar along with the order of the Central Government, who shall carry out necessary changes in the certificate of incorporation.
If LLP fails to comply, then CG will allot new name and Registrar shall enter new name in register of LLP. |
| 9 | CHAPTER III, Sec 18
Application for direction to change name in certain circumstances. |
Omitted. |
| 10 | CHAPTER III, sec 21(2)
Publication of name and limited liability. |
Removed the minimum amount of penalty and
Reduce the maximum amount of penalty from 25,000 to Rs 10,000. |
| 11 | CHAPTER IV, Sec 25
registration of changes in partners.
25(4)-Fine imposed for contravention of sub-section (2) by LLP.
25(5)- Fine imposed for contravention of sub-section (1) by partners.
|
Imposed penalty on- such LLP and its every designated partner shall be Rs 10,000.
Imposed penalty on- such partner shall be Rs 10,000. |
| 12 | CHAPTER V, sec 30(2)
Unlimited liability in case of fraud. |
Increase the period of imprisonment from 2 years to 5 years |
| 13 | CHAPTER VII, Sec 34(5) maintenance of books of accounts, other records, and audit, etc
|
Subsection (5) is substituted having effect as under:
(5) Any LLP which fails to comply with the provisions of sub-section (3), such LLP and its designated partners shall be liable to a penalty of RS 100 for each day during which such failure continues, subject to a maximum of Rs 100,000 for the LLP and Rs 50,000 for every designated partner.
(6) Any LLP which fails to comply with the provisions of sub-section (1), (2) and (4), such LLP shall be punishable with fine which shall not be less than Rs 25,000 but may extend to 5 Lakh Rupees and every designated partner of such LLP shall be punishable with fine which shall not be less than Rs 10,000 but may extend to one lakh rupees.
|
| 14 | CHAPTER VII, Sec 35(2) & (3)
Annual Return
|
penalty of Rs 100 for each day during which such failure continues,
and reduce the maximum amount of penalty for LLP from 5 lakh to 1 lakh and for designated partner from Rs 1 lakh to Rs 50,000. |
| 15 | CHAPTER VII, sec 34A
Accounting standards and Auditing standards |
Central government may prescribe accounting standards and auditing standards for classes of LLPs. |
| 16 | CHAPTER VII, sec 39
Compounding of offences |
Substituted new section for section 39 having effect as under:
Now 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.
Application has to be filled with Registrar then the registrar will forward to regional director or any other officer not below the rank of Regional Director authorised by the Central Government. |
| 17 | CHAPTER XII, sec 60(4)
Compromise or arrangements of LLPs |
Penalty of Rs10,000 for LLP and designated partner.
For continuing default, further penalty of Rs 100 for each day, subject to a maximum- Rs 1 lakh for LLP and Rs 50,000 for every designated partner.
|
| 18 | CHAPTER XII, Sec 62(4)
Provisions for facilitating reconstruction or amalgamation of LLPs. |
Penalty of Rs10,000 for LLP and designated partner. For continuing default, further penalty of Rs 100 for each day, subject to a maximum penalty Rs 1 Lakh for LLPs and Rs 50,000 for Designated partner.
Explanation for this section added- a “limited liability partnership” shall not be amalgamated with a company.’
|
| 19 | CHAPTER XIV, sec 67A
Establishment of special court
Sec 67B- Procedures and powers of special courts.
Section 67C –Appeals and Revisions. |
By introducing this section, it will help in speedy trial of the cases. Central Government may establish or designate as many Special Courts as may be necessary for such area or areas.
All offence which is specified u/s 67A (1) shall be triable only by the special courts having jurisdiction. Special Court may, if it thinks fit, try in a summary way any offence under this Act which is punishable with imprisonment for a term not exceeding three years, and the sentence for conviction shall not exceed 1 years.
High court having jurisdiction, may exercise all the powers conferred on it. |
| 20 | CHAPTER XIV, sec 68A
Registration office. |
New section is inserted.
Central government may establish as numbers of registration offices for the purpose of registrations of LLPs. |
| 21 | CHAPTER XIV, sec 69
Additional fees
|
Discussed below. |
| 22 | CHAPTER XIV, sec 72(2)
Jurisdiction of Tribunal and appellate tribunal |
Appeal against the order of Tribunal shall be lie to appellate tribunal within 60days from the date of copy received by the appellant. Further period of 60days shall be allowed after sufficient cause.
No appeal lies against the consent order. |
| 23 | CHAPTER XIV, Sec 73
Penalty on non-compliance of any order passed by tribunal
|
Omitted. |
| 24 | CHAPTER XIV, Sec 74
General Penalties |
Penalty-Rs 5,000
Continuing contravention-100 each day till default continue, subject to maximum Rs 1 Lakh. |
| 25 | CHAPTER XIV, sec 76A
Adjudication of penalty |
The Central Government may appoint adjudicating officers to award penalties under the Act under the New Amendment. These will be officers in the Central Government with at least the rank of Registrar. The Regional Director will hear appeals against the Adjudicating Officers’ orders
|
| 26 | CHAPTER XIV, sec 77
Jurisdiction of court |
section 77 has been totally substituted. Now special court have the jurisdiction and power to impose punishments u/s 30 of the Act. And all the criminal cases pending against the LLPs and its partners shall be transferred to special courts. |
| 27 | CHAPTER XIV, sec 77A
Cognizance of offences |
Only special court shall take cognizance of any offence punishable under this act on complaint in writing made by registrar or any officers not below the rank of registrar duly authorise for such purpose. |
FEES APPLICABLE AS PER LLP (AMENDMENT) RULES 2022.
- Fees applicable for registration of new LLP or conversion of companies to LLP
| SR.
NO |
LLPs CONTRIBUTIONS
|
FEES APPLICABLE |
| 1 | LLPs whose contribution up to Rs. 1 lakh | Rs. 500 |
| 2 | LLPs whose contribution Rs. 1 lakh – Rs. 5 lakhs | Rs. 2,000 |
| 3 | LLP whose contribution Rs. 5 lakhs – Rs. 10 lakhs | Rs.4,000 |
| 4 | LLP whose contribution Rs. 10 lakhs – Rs. 25 lakhs | Rs.5,000 |
| 5 | LLP whose contribution Rs. 25 lakhs – Rs. 1 Crore | Rs.10,000 |
| 6 | LLP whose contribution exceeds Rs. 1 Crore | Rs.25,000 |
- For Filing, registering, or recording any document, form, statement, notice, Statement of Accounts and Solvency, annual return, and an application along with the Statement for conversion of a firm or a private company or an unlisted public company into LLP.
| SR.
NO |
LLPs CONTRIBUTIONS
|
FEES APPLICABLE |
| 1 | LLPs whose contribution up to Rs. 1 lakh | Rs.50 |
| 2 | LLPs whose contribution Rs. 1 lakh – Rs. 5 lakhs | Rs. 100 |
| 3 | LLP whose contribution Rs. 5 lakhs – Rs. 10 lakhs | Rs. 150 |
| 4 | LLP whose contribution Rs. 10 lakhs – Rs. 25 lakhs | Rs. 200 |
| 5 | LLP whose contribution Rs. 25 lakhs – Rs. 1 Crore | Rs. 400 |
| 6 | LLP whose contribution exceeds Rs. 1 Crore | Rs. 600 |
- Fee for filing, registering, or recording notice of appointment, cessation, change in name, address, designation of a partner or designated partner, intimation of Designated Partner Identification Number and consent to become a partner or designated partner in LLP Form No. 4:
| SR.
NO |
Form of LLP
|
FEES APPLICABLE |
| 1 | For Small LLPs | Rs.50 |
| 2 | For Other than Small LLPs | Rs.150 |
- Fee for any application other than application for conversion of a firm or a private company or an unlisted public company into LLP shall be as under:
| SR.
NO |
Purpose | Small LLPs | Other than small LLPs. |
| 1 | For reservation of name under section 16 of the Act | Rs. 200 | Rs. 200 |
| 2 | For direction to change the name under section 17 of the Act | Rs. 5,000 | Rs. 5,000 |
| 3 | For striking off name of defunct Limited Liability Partnership under rule 37 | Rs. 500 | Rs. 1,000 |
| 4 | Application for reservation of name under Rule 18(3) | Rs.10,000 | |
| 5 | Application for renewal of name under Rule 18(3) | Rs. 5,000 | |
- Fee for inspection of documents or for obtaining certified copy thereof shall be as under:
| SR.
NO |
purpose
|
FEES APPLICABLE |
| 1 | For inspection of documents of an LLP under section 36 | Rs. 50 |
| 2 | For copy or extract of any document under section 36 to be certified by Registrar | Rs. 5/- per page or fractional part thereof |
- Fee for filing any form or a Statement of Account and Solvency or a notice or a document by foreign limited liability partnership:
| SR.
NO |
Purpose |
FEES APPLICABLE |
| 1 | For filing a document under rule 34(1) | Rs. 5,000 |
| 2 | Any other form or Statement of Account and Solvency or notice or document. | Rs. 1,000 |
- Following Table of additional fee shall be applicable for delay in filing of forms.
| SR.
NO |
Period of delays | Small LLPs
(in times of normal fees) |
Other than small LLPs (in times of normal fees) |
| 1 | Upto 15 days | One time | One time |
| 2 | 15 days – 30 days | 2 times | 4 times |
| 3 | 30 days – 60 days | 4 times | 8 times |
| 4 | 60 days – 90 days | 6 times | 12 times |
| 5 | 90 days – 180 days | 10 times | 20 times |
| 6 | 180 days – 360 days | 15 times | 30 times |
| 7 | Beyond 360 days | other than form 8 & 11– 25 times
for form 8 & 11-15 times + 10 per day beyond 360 days. |
other than form 8 & 11- 50 times
for form 8 & 11-30 times + 10 per day beyond 360 days.
|
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