The Ministry of Corporate Affairs (MCA) amended the Limited Liability Partnership Rules, 2009 vide a notification dated 11th February 2022 and inserted new rules concerning the Limited Liability Partnerships (LLPs), called the Limited Liability Partnership (Amendment) Rules, 2022 and another notification dated 4th March 2022, which were called the Limited Liability Partnership (Second Amendment) Rules, 2022, effective from 1st April 2022.
5 Designated Partners without DIN
The amendment now allows a maximum of 5 DPINs at the time of incorporation.
Web-based process for LLP formation
The LLP forms are made web-based. Every LLP shall mandatorily mention its latitude, longitude in the Address Book. Also, the details of the Directors can be fetched from the DigiLocker Database.
Allotment of PAN and TAN Application, along with the Certificate of Incorporation
The PAN and TAN registrations shall be done at the time of incorporation, and the certificate shall be shared over email by MCA, immediately after incorporation, along with the Certificate of Incorporation.
Consent of Partners Filing at the time of Incorporation (In form 9)
The Consent of Partners form has been made web-based, which means the requirement to have DSCs for all Partners are mandatory.
Relaxation in requirement of mentioning the name of authority under which name change application is filed (For Rule 19(4) of the LLP Rules, 2009)
As per the current rule, the requirement of attaching the authority under which such a person is making an application is taken away. This will reduce the compliance burden of the LLPs.
Signing of Statement of Accounts & Insolvency of LLPs under Insolvency (For Rule 24(6) of the LLP Rules, 2009)
As per current rule, the Statement of Account and Solvency may be signed on behalf of the LLP by an Interim Resolution Professional or Resolution Professional, or Liquidator or LLP Administrator in case where the Corporate Insolvency Resolution Process (CIRP) has been initiated against the LLP under the IBC, 2016 or the LLP Act, 2008.
Certificate of Truthfulness and Correctness of Annual Returns of LLPs with the sales of up to INR 5 Crore or Partner’s Contribution up to INR 50 Lakhs
The Statement of Account and Solvency may be signed on behalf of the LLP by an Interim Resolution Professional or Resolution Professional, or Liquidator or LLP Administrator and no certification by designated partners shall be required.
Penalties and Compounding of Offenses (in form 11 – Annual Return)
Earlier, the form 11 filed for Annual Return, did not have provision to mention Penalties and Compounding of Offenses. Now, the same has been amended.
Every change made to the deed shall be marked in form 3 with precise information.
Statement of Solvency and Annual Return in form 8
Earlier, there were no reporting with regard to Contingent Liability. Now, the reporting is included and will have to precisely mention w.r.t. Contingent Liability
Place of maintenance of Accounts other than the Registered office of LLP where the service of the notice can be made
Earlier, this form 12 was not notified. Now, the same has been notified and deployed.
Application by a Proprietor of a registered trademark (Insertion of Rule 19(1))
Any Company or a LLP, which already has a name which is similar to or which too nearly resembles the name of a limited liability partnership incorporated subsequently, may apply to the Registrar in Form 23 to give a direction to that limited liability partnership incorporated subsequently to change its name, in form 23 to the Regional Director. Now, the same is extended to the Proprietor of a registered trademark.
Allotment of Name to Existing LLP (Insertion of Rule 19A)
If its instructed for any LLP to change its name either by the Regional Director, or by the Registrar of Companies, and the LLP, do not change the name within 3 months of time stipulated, the new name of the LLP shall be a combination of the below:
- Letters Letters ‘ORDNC’ (Order of Regional Director Not Complied)
- Year of passing direction
- Serial number
- Existing LLPIN
And a new COI shall be issued in form 16A.
Adjudication of LLP Penalties (Insertion of Rule 37A, 37B, 37C, 37D)
Rule 37A – Adjudication of penalties
The new rule 37A provides for the adjudication of LLP penalties. The Central Government can appoint any officer not below the rank of Registrar as adjudicating officers for adjudicating penalty under the LLP Act. The adjudicating officer can pass an order of penalty against an LLP after sending notice and hearing the concerned person of the LLP.
The adjudicating officer will send the order copy to the partner/designated partner of the LLP and the regional director. The LLP must pay the penalty only through the MCA portal.
Rule 37B – Appeal against order of adjudicating officer
The LLP can file an appeal within 60 days of passing the order by the adjudicating officer in form 33 – LLP ADJ setting forth the appeal grounds.
Rule 37C -Registration of appeal
The regional director’s office will register the appeal and give a serial number when it is in order. The regional director will notify the adjudicating director against whose order an appeal is filed.
Rule 37D – Disposal of appeal by Regional Director
The regional director will hear the parties to the appeal and pass an order in writing. The order passed by the regional director will be communicated to the adjudicating officer, the appellant (LLP that files the appeal), and the Central Government.