Key changes introduced in Limited Liability Partnership (Amendments) Rules, 2022

   Introduction 

 

In a notification dated March 4, 2022, the Ministry of Corporate Affairs published the "Limited Liability Partnership (Second Amendment) Rules, 2022." The amendment was proposed to update the existing Limited Liability Partnership Rules, 2009. The same will take effect the day after it is published in the official gazette.




 

 Key changes introduced in LLP (Amendments) Rules, 2022 

 

A. New web-based forms for the formation of LLP

 

  • The LLP Amendments, 2022 have made all the LLP forms as web-based forms.

 

  • Now, the LLP incorporation process should only be completed through web-based forms, just like the SPICe Plus Forms are for the incorporation of companies.

 

  • The most significant modification brought by this amendment is that now every LLP is required to include Latitude and Longitude in the Address Block.

 

  • The Digi Locker Database can be used to retrieve the Directors' information.

 

B. Need not to apply for PAN and TAN separate from the incorporation application

 

  • The notification specifies that the Registrar shall issue the Certificate of Incorporation of an LLP in Form 16

 

  • The Registrar must include the PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) given by the Income Tax Department in the said Form 16.

 

  • This means that, as is the case with companies, the incorporation of limited liability partnerships will now include the PAN and TAN applications, therefore LLPs need not apply for them separately.

 

  • As a result, the LLPs will receive their PAN and TAN together with the official Certificate of Incorporation.

 

C. There should be 5 Designated Partners instead of 2 without DIN

 

  • The significant change brought by the Limited Liability Partnership (Second Amendment) Rules, 2022 is that now the application for the allocation of DPIN shall be made by a maximum of 5 individuals in the Form FiLLiP.  This means that at the time of incorporation, there can now be five Designated Partners (without having a DIN) instead of just two.

 

  • This is a massive step towards enabling the appointment of more than two Designated Partners (without DPIN/ DIN), with a maximum of five Designated Partners at the time of incorporation.

 

D. Statement of Solvency and Certificate of Truthfulness by LLP

 

  • The Statement of Account and Solvency must now be signed on behalf of the LLP by an interim resolution professional, resolution professional, liquidator, or LLP partnership administrator under the Limited Liability Partnership (Second Amendment) Rules, 2022.

 

  • Previously, the DPs who were in charge of the compliances were required to sign the Statement of Solvency.

 

  • The revised rules also include the obligation of filing a Certificate of Truthfulness and Correctness of Annual Returns of LLPs with Partner's Contribution of up to INR 50 Lakhs or sales of up to INR 5 Crore.

 

  • Form 8 (Statement of Solvency and Annual Return) will now include specific reporting for contingent liabilities.

 

E. Other changes in LLP (Amendments) Rules, 2022

 

  • Now, Form 9 is a web-based form that is made online for filing Consent of Partners while earlier, it was required to be filled in an offline format.

 

  • As a result, the Digital Signatures of all Designated Partners will be required at the time of LLP incorporation instead of just 1 DSC of the Designated Partner.

 

  • Forms 28 and 29 have been combined. Due to this, form 28 should be filed with the Notice of:

 

  1. Modification in the COI (Certificate of Incorporation or Registration)

  2. Modifications in any person's name or address who is authorized to accept services on behalf of a foreign LLP.

  3. A change in the principal business location in India.

  4. Cessation of having a place of business in India.

 

  • It should be noted that each modification to the LLP Deed must be recorded in detail in Form 3. Earlier only the deed was required to be attached.

 

  • Now, Form 11 (Annual Return) should include information about penalties and compounding of offenses.

 

  • According to the LLP (Amendments) Rules, 2022, special courts should be set up for speedy trials on criminal offenses like fraud.

 

 Conclusion 

 

The Limited Liability Partnership (Second Amendment) Rules, 2022 is a welcome and significant move by the Ministry of Corporate Affairs. These changes will help the businesses registering as LLPs to ease the process of Incorporation of an LLP. The said amendments came into enforcement on the 1st day of April 2022.

 

 

 

 

Comments

Post a Comment

Popular posts from this blog

All About ITR 6 Company Annual Filing | Ebizfiling

Image
    Introduction     If a company does not eligible for an exemption under Section 11 of the Income Tax Act of 1961, it must file an ITR 6 Form electronically to file its income tax returns. It is an annual compliance for a Private Limited Company . The companies that receive income from real estate held for charitable or religious purposes are eligible to seek an exemption under Section 11 ((Income from property held for charitable or religious purposes) of the Income-tax Rules. Therefore, companies that do not claim tax exemption under section 11 have to file an ITR 6.       What is ITR 6 form?     The ITR 6 form is an electric form filed by companies that do not claim an exemption under section 11 of the Income Tax Rules. It is a form that represents the company's income and expenses for the specific year. It is a mandatory compliance that a Private Limited Company has to file annually.     Who is qualified for filing ITR 6 form?     The following are eligible for filing ITR 6 f
Read more

How Professional Employer Organizations (PEO) are helpful for new emerging start-ups?

Image
  Introduction      Professional Employer Organizations (PEO) with experience in the local markets can assist the business to improve and grow. A person who wants to expand a freshly formed business in a foreign country needs some time to do market research, understand local consumer trends, and get to know the demands of the public. A PEO functions under the co-employment idea, which enables you to delegate tasks to multiple companies. In this blog, we will talk about- How PEO benefits your start-up?   What is a PEO (Professional Employer Organization)?      A full-service co-employment human resource outsourcing structure is referred to as a PEO ( Professional Employer Organization ). They usually act as professional employers for the employees of their clients.  When the client company reports its salary using the PEO's federal employer identification number (FEIN), employee obligation is transferred to the PEO.  In this arrangement, the PEO oversees payroll and other administra
Read more

Annual Compliance Filed By An LLP | Ebizfiling

Image
  Introduction All Limited Liability Partnerships (LLP) that are registered in India must comply with certain annual compliances that are specified by the Ministry of Corporate Affairs (MCA). An LLP should also comply with the requirement of Income Tax Filings and the Registrar of Companies (ROC). In this blog, we will discuss all the required annual compliance filed by LLP.   What Limited Liability Partnership?   An LLP is a hybrid form of business entity. The partners of an LLP enjoy the benefits of limited liability like companies and the flexibility of a partnership. It is governed by the Limited Liability Partnership Act, 2008. The existence of an LLP cannot be affected from the death or removal of any partner. Every year an LLP needs to comply with LLP Annual filing.   Annual compliance filed by an LLP   Once you incorporate an LLP, there are certain annual compliance to be filed annually. The required annual compliance by a Limited Liability Partnership is listed below in a ta
Read more