The Ministry of Corporate Affairs (“MCA”) introduced LLP Act Amendment 2021 vide Notification S.O. 621(E) dated February 11th 2022 stated that Sections 1 to 29 of the Limited Liability Partnership (Amendment) Act, 2021 (“Act”) shall come into force from April 1st 2022. This Amendment Act shall amend the LLP Act, 2008.
The Act has brought about the concept of start-up LLP and small LLP. The penalties concerning these two are also lesser than for other LLPs in case of default. The rationale
for bringing forth this Act is to nudge the start-up culture, especially those entities recognised as unicorns. It will not only help attract investments but also provide a certain degree of flexibility due to less stringent provisions, thus helping boost businesses in India.
Additionally, the Ministry of Corporate Affairs vide its Notification no. G.S.R. 110(E) dated February 11th 2022, has notified that the provisions of sections 90, 164, 165, 167, 206 (5), 207 (3), 252 and 439 of the Companies Act, 2013 shall apply to LLPs. MCA has, however, clarified that these sections will not apply to LLPs mutatis-mutandis and except where the context otherwise requires, they would
apply as per the modifications as specified. These changes mainly seek to make the LLPs better compliant and bring them in line with the latest legal developments.
Furthermore, the Ministry of Corporate Affairs vide its Notification no. G.S.R. 109(E) dated February 11th 2022 has notified Limited Liability Partnership (Amendment) Rules, 2022 to further amend the existing Limited Liability Partnership Rules, 2009. The said amendments are notified to bring the existing rules in line with the Limited Liability Partnership (Amendment) Act, 2021.
Amendments have been made to Rules 5, 18, 19 and 37. New rules are added concerning the allotment of a new name to existing LLPs under Section 17 (3), adjudication of penalties, appeal against the order of adjudicating officer, registration of appeal and disposal of appeal by Regional Director. Further, also two new forms are notified Form 16A and Form 33.CG also revised the fee norms for LLP by substituting the existing Annexure A.
Also, the Ministry of Corporate Affairs in its continuous endeavour to serve companies better is launching a new way of e-filing for LLP on the MCA21 portal. All LLP filings going forward will be web-based. This application is proposed to have been launched on March 6th 2022.
Earlier, the LLP Settlement Scheme 2020 was launched in the wake of Covid-19 as a one-time relaxation provided to LLPs that had defaulted in filing the statutory documents within the required due dates. Presently, the various aforementioned legal developments relating to LLPs indicate that LLPs are given greater flexibility in case of filing requirements, reduction of penalties for various compoundable offences, boosting the ease of doing business by incentivising a business-minded approach to start-ups and ensuring timely adjudication process. Thus, these approaches by the Government of India and MCA reflect the initiatives taken to further encourage LLPs as a form of business in India.