Clause

Purpose

Old Position

Amended position

comments

2(ia)

Introduction of the term ‘debenture’

“debenture” means a non-convertible debenture issued by a limited liability partnership evidencing a debt and constituting a charge on the assets of such limited liability partnership.

The “Company Law Committee on decriminalization of the LLP Act, 2008 (2021)”, proposed insertion of a new section ‘33A’ in the LLP Act, 2008, according to which LLPs will have the power to issue secured non-convertible debentures to bodies corporate or trusts regulated by SEBI or RBI.

As per our understanding, even though Section 33A has not been included in the Bill, the intention of the government to allow LLPs to issue debentures is manifest by the insertion of this section.

2(ra)

Introduction of ‘Regional Director’

“Regional Director” means a person appointed as such by the Central Government for the purposes of this Act or the Companies Act, 2013, as the case may be.

Regional Director has been given the power to compound the offences under the Bill (Morefully described in Clause 39 below).

2(ta)

Introduction of the concept of ‘Small LLP’

Small LLP has been defined by way of ‘contribution’ and ‘turnover’

1. If contribution does not exceed 25 lakh rupees or such higher amount, not exceeding 5 crore rupees as may be prescribed.

2. If the turnover for the immediately preceding financial year, does not exceed 40 lakh rupees or such higher amount, not exceeding 50 crore rupees, as may be prescribed.

Benefits of Small LLP are morefully described in Clause 76 below.

7

Change in definition of ‘Resident in India’

Every LLP must have 2 designated partners who are individuals and at least one of them shall be a resident in India

Resident in India means a person who has not stayed in India for a period of not less than 182 days during the immediately preceding year

Resident in India means a person who has not stayed in India for a period of not less than 120 days during the immediately preceding year.

15

Name of an LLP can now be similar to certain ‘body corporates’, partnership firms and ‘trademark’ which is under application and not yet registered

No limited liability partnership can be registered by a name which is — (a) undesirable; or (b) identical to that of any other partnership firm or limited liability partnership or body corporate or a registered trade mark, or a trade mark which is the subject matter of an application for registration of any other person under the Trade Marks Act, 1999 (47 of 1999).

No limited liability partnership can be registered by a name which is — (a) undesirable; or (b) identical to that of any other limited liability partnership or a company or a registered trade mark of any other person under the

Trade Marks Act, 1999.

Body Corporate has been defined as: (i) a limited liability partnership registered under this Act; (ii) a limited liability partnership incorporated outside India; and (iii) a company incorporated outside India, but does not include— (i) a corporation sole; (ii) a co-operative society registered under any law for the time being in force; and (iii) any other body corporate (not being a company as defined in section 3 of the Companies Act, 1956 (1 of 1956) or a limited liability partnership as defined in this Act), which the Central Government may, by notification in the Official Gazette, specify in this behalf;

As per our understanding, an LLP registered in India can now have a similar name to :

1. An LLP incorporated outside India;

2. A company incorporated outside India.

17

Change of name of limited liability partnership

If the Central Government opines that the name of the LLP is similar to other LLP, body corporate, partnership firm, registered trademark, trade mark which is the subject matter of an application for registration, then the Central Government can direct the LLP to change its name and the LLP needs to make the necessary change within 3 months of such direction or such longer period as may be prescribed.

If LLP does not comply, monetary penalty will be imposed on the LLP.

If on the receipt of an application by the Central Government (application received from LLP, company, registered trademark) that the name of the LLP is similar to other LLP, company, registered trademark, then the Central Government can direct the LLP to change its name and the LLP needs to make the necessary change within 3 months of such direction.

If LLP does not comply, Central Government will allot a new name to the LLP.

As per our understanding:

1. monetary penalty has been removed for non-compliance with this section;

2. Central Government’s power to take suo moto cognizance of name infringement has been withdrawn.

30

Punishment for fraud

If an LLP or its partners carry out an activity to defraud their creditors, or for any other fraudulent purpose, every person party to it knowingly is punishable with imprisonment of up to two years and a fine between Rs 50,000 and five lakh rupees. 

If an LLP or its partners carry out an activity to defraud their creditors, or for any other fraudulent purpose, every person party to it knowingly is punishable with imprisonment of up to five years and a fine between Rs 50,000 and five lakh rupees. 

34A

Introduction of Accounting Standards for LLPs

The Central Government in consultation with the National Financial Reporting Authority (a) prescribe the standards of accounting; and (b) prescribe the standards of auditing, as recommended by the Institute of Chartered Accountants of India for a class or classes of limited liability partnerships.

39

Compounding of Offences

The Central Government has the authority to compound an offence which was punishable with fine.

A regional director (or any officer above his rank), appointed by the Central Government, may compound such offences.  The amount imposed must be within the minimum and maximum fine for the offence.  If an offence by an LLP or its partners was compounded, then a similar offence cannot be compounded within a three-year period.

As per our understanding, the Regional Director can take suo moto cognizance regarding the compounding of offences.

Additionally, for compounding, an application can be filed with the Registrar who may forward the same to the Regional Director after giving his comments.

If an offence is compounded, then no prosecution can be initiated in relation to such an offence. If prosecution is initiated and subsequently the offence is compounded, then the prosecution will be dropped.

67A, 67B and 67C

(These sections have to be read with Section 77 below

Establishment of Special Courts

The Bill allows the central government to establish special courts for ensuring speedy trial of offences under the Act.  The special court will consist of: (i) a Sessions Judge or an Additional Sessions Judge, for offences punishable with imprisonment of three years or more; and (ii) a Metropolitan Magistrate or a Judicial Magistrate, for other offences.  They will be appointed with the concurrence of the Chief Justice of the High Court.  Appeals against orders of these special courts will lie with High Courts.

The Special Court has the power to try offences in a summary manner for those offences wherein the imprisonment does not exceed 3 year. In case of conviction in a summary trial, maximum imprisonment cannot exceed 1 year.

72

Jurisdiction of Appellate Tribunal

Any person aggrieved by an order or decision of Tribunal may prefer an appeal to the Appellate Tribunal.

Any person aggrieved by an order or decision of Tribunal may prefer an appeal to the Appellate Tribunal within 60 days from the date on which copy of order is made available to the aggrieved.

If 60 days expire, then appeal may be filed in additional 60 days if Appellate Tribunal is satisfied that there is sufficient cause of delay.

73

Penalty of Non-compliance of Order passed by Tribunal

Imprisonment upto 6 months and fine of upto Rs. 50,000/- (Rupees Fifty Thousand Only).

No penalty has been prescribed.

76A

Appointment of Adjudicating Officers || Benefits of Small and Startup LLP

Adjudicating Officers:

The central government may appoint adjudicating officers for awarding penalties under the Act.  These will be central government officers not below the rank of Registrar.  Appeals against orders of the Adjudicating Officers will lie with the Regional Director.

Benefits of Small and Startup LLP

If penalty is payable for non-compliance of any of the provisions of this Act by a small limited liability partnership or a start-up limited liability partnership or by its partner or designated partner or any other person in respect of such limited liability partnership, then the penalty shall be half of the penalty specified in such provisions subject to a maximum of one lakh rupees for limited liability partnership and fifty thousand rupees for every partner or designated partner or any other person, as the case may be.

What is a Startup LLP:

• Turnover should be less than INR 100 Crores in any of the previous financial years;

• An LLP shall be considered as a startup up to 10 years from the date of its incorporation;

• The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth.

• An LLP formed by splitting up or reconsutrctuon of an existing business shall not be considered a “Startup”.

77

Jurisdiction of Courts

Judicial Magistrate of the first class (“JMFC”) or, as the case may be, the Metropolitan Magistrate (“MM”) shall have jurisdiction to try any offence under this Act and shall have power to impose punishment in respect of said offence.

Special Courts have the jurisdiction to try offences and impose punishment.

All such cases pending before JMFC or MM will be transferred to Special Courts.

S. No.

Forms

Section & Rules

Particular of Compliance

QUARTER – I – APRIL TO JUNE

1.       

Receipt of MBP-1

184(1)

Form

Every Director of the Company in the First Meeting of the Board of Director in each Financial Year shall disclose his interest in the other entities.

MBP- 1

Every Director is required to submit with the Company a fresh MBP-1, whenever there is a change in his interest from the earlier given MBP-1.MBP-1 is not required to file with ROC.

2.       

Receipt of DIR- 8

164(2)

Form

Every Director of the Company in each Financial Year will submit with the Company disclosure of non-disqualification.

143(3)(g)

DIR – 8

3.       

Half Yearly Return

Section 405

MSME-1

Delay in the Payment to MSME Vendor: Company have to file this return half-yearly in respect of pending payments to the MSME vendors as at end of half -year. (only for payment pending for period more than half year) 

·       October to March     – 30^th April

·       April to Sep      – 30^th October

4.       

Yearly Return

Section 73

E-form

Return of Deposit: Company is required to file this form every year on or before 30^thJune in respect of return of Deposit and Particulars not considered as Deposit as on 31st March.

 Rule 16

DPT-3

(June)

QUARTER – II – JULY TO SEPTEMBER

5.       

Approval of Financial Statement

134

Preparation and Approval of Financial Statement. The auditors’ report shall be attached to every financial statement

6.       

Directors’ Report

134

Directors’ Report shall be prepared by mentioning all the information required for the Company under Section 134 read with relevant rules and relevant provisions of other Act.

It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors, one of them should be a MD if there is any.

7.       

Holding of AGM

96

Every company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting.

 it shall be held within a period of six months, from the date of closing of the financial year.

8.       

Notice of

101 & SS-II

Every Notice of the Annual General Meeting will be prepared as per Section 101 of the Companies Act, 2013 and Secretarial Standard – II.

AGM

9.       

Sending of Notice of AGM

101 & SS

Notice of the Annual General Meeting will be sent to all the:

·       Directors,

·       Members,

·       Auditors

. Debenture Trustees.

10.   

Circulation of Financial Statement &other relevant Doc

136

Company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 21 clear days before the Annual General Meeting.

In case the AGM is called on shorter notice then above mentioned documents shall be circulated on such shorter period.

For holding of the AGM on shorter notice, companies need to take the proper approvals as per the Act.

11.   

Annual Form

Rule 12A

DIR-3 KYC

KYC of Directors: All the Directors of the Company shall file this form on or before 30th September every year.

QUARTER – III – OCTOBER TO DECEMBER

12.   

Annual Form

137

E-form:

Financial Statement: Company is required to file its Balance Sheet along with the Statement of Profit and Loss Account, Cash flow statement, Directors’ Report and Auditors’ Report in this form within 30 days of holding of the Annual General Meeting.

AOC-4

Attachment:

Balance Sheet, Statement of Profit & Loss Account, Cash Flow Statement, Directors’ Report, Auditors’ Report and the Notice of  the AGM

13.   

E- Forms Filing Requirements

92

E-form:

Annual Return: Every Company will file its Annual Return within 60 days of holding of the Annual General Meeting.

Annual Return will be for the period from 1^st April to 31^st March.

Annual Form

MGT-7

Annual Return of Every Private Company (Except Small Company) should be signed by a Company Secretary in Practice. 

14.   

Certification of Annual Return

92

MGT-8

Private Company having paid-up share capital of 10 Crore or more or turnover of Rs. 50 crore or more shall be certified by a Company Secretary in Practice.

QUARTER – IV – JANUARY TO MARCH

There is no mandatory compliance for this quarter.

15.   

Board Meetings

173 &

Every Company shall hold a minimum number of FOUR meetings of its Board of Directors every year in such a manner that maximum gap between the two meetings should not be more than 120 (One hundred twenty) days.

SS-I

16.   

Maintenance of Statutory Registers

88 and other sections

Company will maintain the following mandatory Registers:

·Register of Director,

·Registers of Director Shareholding,

·Registers of Members

·Registers of Transfer

·Registers of Related Party transaction etc.

17.   

Appointment of Auditor

139

E-form

The Auditor will be appointed for 5 (Five) years and form ADT-1 will be filed for 5-year appointment within 15 days of the Annual General Meeting.

ADT-1