Are you running a company registered under LLP? A new LLP Amendment Act has been introduced in 2021. Further, you should know how it can effect your business. The Act has been in effect since 1st April, 2022. In this article we will discuss, Section wise Impact of LLP (Amendment) Act, 2021.
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Brief Overview
The LLP (Amendment) Act, 2021 came into effect after the Limited Liability Partnership (Amendment) Bill, 2021 was passed by the Rajya Sabha on 4th August, 2021 and the Lok Sabha on 9th August, 2021. It became operative when the President signed it on 13th August, 2021. Further, as on 1st April, 2022 the section 1-29 of the said Act became operative.
The act has inserted 7 new sections, omitted 3 sections and substituted 5 sections.
Objective of the Amendment
The main objectives of the LLP Amendment Act are as follows,
- To increase the Ease of doing business by introducing Start-Up LLP and Small LLP
- Remove the fear of criminal prosecution for some offences
- Empowering the Central Government to prescribe Accounting Standards and Auditing Standards
- Establishing a Special Court
- Gives power to the Regional Director to compound any offence which is compoundable with fine only
Table of Amendment
The following is a Table of changes that the LLP (Amendment) Act, 2021 has brought,
| Section of the LLP Act, 2008 | Section Name | Effect of the LLP (Amendment) Act | New Section Insertion |
| 1 | Short Title and Commencement | Substituted | |
| 2 | Definitions | Substituted | |
| 7 | Designated Partner | Substituted | |
| 10 | Punishment for Contravention of Section 7,8,9 | Figure 8 shall be omitted | |
| 13 | Registered office of LLP and change therein | Substituted | |
| 15 | Name of LLP | Substituted | |
| 17 | Change of Name of LLP | Substituted | |
| 18 | Application for direction to change name in certain circumstance | Omitted | |
| 21 | Publication of Name and Liability | Substituted | |
| 25 | Registration of changes in partner | Substituted | |
| 30 | Unlimited Liability in case of Fraud | Substituted | |
| 34 | Maintenance of books, accounts, other records and audit, etc | Inserted | 34-A |
| 35 | Annual Return | Substituted | |
| 39 | Compounding of Offences | Substituted | |
| 60 | Compromise or Arrangement of LLP | Substituted | |
| 62 | Provisions for facilitating reconstruction or amalgamation of LLP | Substituted | |
| 67 | Application of provisions of Companies Act | Inserted | 67A, 67B and 67C |
| 68 | Electronic Filing of documents | Inserted | 68-A |
| 69 | Payment of Additional fee | Substituted | |
| 72 | Jurisdiction of tribunal and appellate tribunal | Substituted | |
| 73 | Penalty on non-compliance of any order passed by tribunal | Omitted | |
| 74 | General Penalty | Substituted | |
| 76 | Offences By LLP | Inserted | 76-A |
| 77 | Jurisdiction of court | Substituted | |
| 79 | Power to make rules | Substituted | |
| 80 | Power to remove difficulties | Interred | 80(1A) |
| 81 | Transitional Provisions | Omitted |
Analysis of the Changes Made
The following are the changes made to the LLP Act,
- Small LLP
- Start-Up LLP
- Prescribe Standard of Accounting and Auditing
- Compounding of Offence
- Establishment of Special Court
- Transfer of pending cases to the Special Court
- Cognizance of Offence
- Establishment of Appellate Tribunal
- Adjudication of Penalties
- Changing Name of LLP
- Change in Definition of “Resident in India”
- Registration Offices
- De-Criminalization of Monetary Penalties
Conclusion
With the establishment of the LLP (Amendment) Act, 2021, the government has taken a much more business friendly approach. Further, the Small LLP and the Start-Up LLP is subjected to lesser regulations, compliances, fees, etc. Moreover, the new court will speed up the trials and there will be new designated officials. Starting a new LLP company will be much easier for you. In conclusion, the new LLP (Amendment) Act, 2021 will make the life of LLP companies much easier.
