The Limited Liability Partnership (Amendment) Bill, 2021 which becomes Act now seeks to reduce the number of offences under the Act to 22, among which 7 being compoundable offences, 3 being non-compoundable offences and 12 being dealt with under the in-house adjudication mechanism.
The Company Law Committee constituted for this purpose, has relied upon 3 basic principles for categorizing which are the offences to be decriminalized or omitted under the Limited Liability Partnership Act, 2008. Those principles are as follows:
principle 1. Offences that are less serious in nature and are minor non-compliance have been decided to be decriminalized and moved to a simple in-house adjudication mechanism instead of being treated as a criminal offence.
Principle 2: Offences that are more appropriately dealt with other laws to be omitted.
Principle 3: Offences that are serious in nature entailing an element of fraud and are non-compoundable to be maintained as is.
entailing an element of fraud and are non-compoundable to be maintained as is.
Introduction of the concept of Small LLP The Bill seeks to introduce a new concept of a Small Limited Liability Partnership in the Act. This concept of small LLP on similar to small company where less compliances and less penalty for default. small LLP is that total contribution should not exceed 25 lakh rupees and turnover (during the immediately preceding financial year) should not exceed ₹40 lakh.
Raising of funds by issue of Non-Convertible Debentures: Act to allow LLPs to issue fully secured Non-Convertible Debentures to body corporate or trusts that are regulated by the SEBI.
Reduction in filing fees and additional fees
Accounting Standards for certain classes for LLP
Establishment of Special Courts for speedy trial of offences.
Other major Amendments are :
Alignment of the provisions of the LLP Act with the Companies act 2013.
Empowering the Central Government to appoint adjudication officers and other officers for carrying out the in-house adjudication mechanism.
Delegation of the powers of compounding to the Regional Director.
Amendment of definition of ‘Business’ under the Act to prohibit the LLPs from carrying on the NBFC Activity, based on the concern raised by RBI.
Empowering the Central Government to direct certain LLPs to change their name if the name is considered undesirable or identical to an existing trademark.