The Limited Liability Partnership (Amendment) Rules, 2022

INTRODUCTION:-

A limited liability partnership is an alternative corporate business form that offers the benefits of limited to the partners. It means every person has liable for the assets of the company but the liability of the partner is limited under the Limited Liability Partnership Act, 2008. After the Limited Liability Partnership Act, 2008, the LLP (Amendment) Bill, 2022 was effective from 1st April 2022. The main aim of this provision is to make life easier for Law-abiding businesses by decriminalizing some Act provisions and providing appointment of adjudicating officers and special courts. The bill also provides the formation of a Small Limited Liability Partnership. The LLP (Amendment) Rules also added two new forms, Form 16A and Form 33 LLP, and revised fee norms for Limited Liability Partnership. 

Small Limited Liability Partnership:-

It means

• The contribution of which does not exceed 25 Lakhs rupees not exceeding 5 Crore rupees.

• The turnover of which, as per the statement of account and solvency for the immediately preceding financial year, does not exceed 40 Lakhs rupees or such a higher amount not exceeding 50 crore rupees, as might be recommended.

• Which meets such other requirements may be prescribed and fulfills such terms and conditions as may be prescribed.

Purpose of Amendment:- 

• It purposes that the government improves the ease of doing business in India. 

• To encourage the business class to incorporate Limited Liability Partnerships.

• It purposes the conversion of Partnership Firms into Limited Liability Partnership. 

• It purposes that the De- Criminalization exercise is to remove criminality of offenses from business Laws. 

Allotment of a new name of Existing limited liability:- Rule 19(1) of the LLP Rules,2009 amendment under Limited Liability Partnership Act, 2022. Rule 19(1) states that the LLP, Company, or proprietor of registered Trademark Act, 1999can apply to the Regional Director to change its name under form 23. The application filed form 23 by a proprietor of a registered trademark is maintainable within 3 years from the change of name of the LLP (Amendment) Act, 2022. According to Section 17(1) of the LLP Act, the central government may directly change the name within 3 months. The new name of the LLP will be the combination of the following;-

• Letters ‘ORDNC’ (Order of Regional Director Not Complied). 

• Serial number 

• Year of passing direction 

• Existing LLPIN. 

The RC will record the new name of the LLP and issued a new certificate of the Limited Liability Partnership in form 16A Rule19 (1).of the LLP ACT, 2022.

Compounding of offenses:-

The Act permitted the local Director or some other official not below the rank of Regional Director, duly authorized by the central government to compound offenses under the Limited liability partnership Act. 

• If an offense by an LLP  by an LLP or its accomplices is compounded, a comparable offense can't be compounded for a period of 3 years.

• Any second or subsequent offense committed after the expiry of the period of 3 years from the date on which the offense was previously compounded shall be deemed to be the first offense. 

• The LLP (Amendment) Rules, 2022 added new rules 37A, 37B, 37C, and 37D regarding the penalties of the offense.

Adjudicating Officers:-

The Central Government may appoint adjudicating officers to award penalties under the Limited Liability Partnership Act. These officers are not below the rank of Registrar. These officers are appointed by the Chief Justice of the High Court. These officers have the power to entertain the cases of appeals against the adjudicating officer’s orders. The officer will give notice to an LLP or any other person who has committed the offense under LLP Act not less than 15 days but not more than 30 days. This notice notifies the offense and penalties which are imposed. The LLP or any other person should reply to the notice only in electronic mode.

The adjudicating officer will pass an order in writing after giving a reasonable opportunity of being heard by the LLP. The officers pass an order within 30 days of the expiry of the period mentioned in the notice where the physical appearance of the party is not required. The concerned person appeared before the adjudicating officer within 90 days from the day of the issue of notice.  

The penalty should be paid through the MCA portal and this penalty amount will be credited to the Consolidated Fund of India.

Appeal against order of Adjudicating Officer:- According to Rule 37B of the LLP(Amendment) Act,2022 the person against whom the adjudicating officer passes an order of penalty can file an advance against such request with the Regional Director's jurisdiction in the matter. The appeal must be filed within 60 days in form 33 of LLP. 

Registration of Appeal:-

According to Rule 37C of the LLP(Amendment) Act,2022 the appeal will be registered and given a serial number if it is found to be in order after scrutiny. The local Director can give time not being under 14 days from the date of intimating the defects to the appellant.  

Disposal of Appeal by the Regional Director:-

Rule 37D of the LLP(Amendment) Act,2022 states that the admission of the appeal. The Regional Director will give the appeal copy to the adjudicating officers against whose order of appeal is filed. The adjudicating officer gives a reply within 21 days to the regional director and also gives a copy of the reply to the appellant person or party. After that, the Regional Director hears the case and passes an order with the consultation of the central government and adjudicating officer.

Fees for Registration of LLP:-

The fees of registration, conversion of a firm, a private or public company in LLP are as given below:-

Fees for Filing LLP Applications:- 

• Fees for name reservation under section 16 of LLP are Rs.200

• Fees for direction to change the name as per section 17 of the LLP is Rs.5,000

• Fees for striking off the name of a defunct LLP under Rule 37 of the LLP under rule 37 for small LLPs is Rs.500 and for other LLPs is Rs.1,000.

Additional Fees for Delay in Filing Forms:- 

• Period of delay for one-time filing forms for LLP.

• 2 times delay of regular filing fees for small LLP and other than small LLP’s beyond 15 days and within 30 days.

• 4 times delay of regular filing fees for small LLPs”s and 8 times for other than small LLPs beyond 30 days and within 60 days.

• 6 times delay of regular filing fees for small LLPs and 12 times for other than small LLPs beyond 60 days and within 90 days.

• 10 times delay of regular filing fees for small LLPs and 20 times for other than small LLPs beyond 90 days and within 180 days.

• 15 times delay of regular filing fees for small LLPs and 30 times for other than small LLPs beyond 180 days and within 360 days. 

• 25 times delay of regular filing fees for small LLPs and 50 times for other than small LLPs beyond 360 days for forms other than form 11 and form 8.

Appellate Tribunal:-  

According to section 67c of this Act, Appeals against the order of the NCLT lies with the National company law appellate tribunal. The appeals must be submitted within 60 days.  But the appeals cannot be made against any order which is passed by the court with the consent of the parties. 

Accounting / Auditing Standards:-

According to section 34, A of the LLP Amendment Act, the consultation of the National Financial Reporting Authority established under the company law has been introduced to allow the central government to prescribe Accounting / Auditing standards for a class or classes of limited liability partnership. 

Power to remove difficulties:-

According to section 80 of the Limited Liability Partnership (Amendment) Act, 2022  no order shall be made after the expiry of a period of three years from the date of commencement of the Limited Liability Partnership Act 2022.

Conclusion:-

It concluded that the limited liability partnership (amendment) act, 2022 provides rights and duties to each partner of the partnership company. The Act empowers to Central government to prescribe the ‘Accounting / Auditing standard’ for a class or classes of Limited Liability Partnership. The Limited Liability (Amendment) Act, 2022, authorizes the Regional director to compound any offense which is punishable with a fine.  The Central Government made some rules if any offense can be committed by any partner of the partnership company then he may be punished by the court and these offenses can be sued where special courts are made by or authorized by the Central Government. The LLP (Amendment) Act, 2022 introduced the new rules 37A, 37B, 37C, 37D, and Rule 19A. According to section 17(1) of the LLP Act given the new name within 3 months. Fee structures are provided under the new amendment Act, 2022

Author:

Radhika Punani
Ambala
I am Radhika from Ambala city. I qualified LLM from Kurukshetra University and B.A.LLB from Maharishi Markandeshwar University