Section-wise Impact of LLP (Amendment) Act, 2021

Impact of LLP Amendment Act 2021

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.

Table of Content

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.

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