Cabinet has given approval to LLP Amendment Bill, 2021 on Wednesday, July 28. This will be the first time that changes are being made to the Act since it came into effect in 2009.
Continuing efforts to foster ease of doing business as well as to encourage the startups ecosystem, the Cabinet has approved LLP Amendment Bill, 2021. They have made 30 amendments to the LLP Act 2008 by LLP Amendment Bill 2021.
Reason for Amendment:
- Ease of Doing Business
- Making LLP model as attractive model for the startups
- To Boost atmanirbhar Bharat
Key Highlights of Amendment:
Decriminalization of the compoundable offences
As per the proposed amendment:
- Penal provisions under the LLP Act will be reduced to 22
- Compoundable offences will be 7
- Non-compoundable offences will be 3
The 12 de-criminalized offences would then get shifted to In-house Adjudication Mechanism (IAM) thereby de-clogging the criminal courts from routine cases
- In all, twelve (12) offences are proposed to be decriminalized and three (3) provision of criminal liability is proposed to be completely omitted.
- The 12 de-criminalized offences would then get shifted to IAM thereby de-clogging the criminal courts from routine cases
Introduction of New Concept:
Small LLP: It is proposed to create a class of LLP called as “Small LLP” in line with the concept of the Small Companies.
Reduction of the Additional fee:
It is also proposed to amend Section 69 of the Act with a view to reduce the additional fee of Rs 100 per day which is presently applicable for the delayed filing of forms, documents.
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