Limited Liability Partnership Services in India Archives

Major Amendments in LLP Incorporation Process- LLP (Second Amendments) Rules, 2022 The Ministry of Corporate Affairs has notified "Limited Liability Partnership (Second Amendment) Rules, 2022" vide its Notification dated 4th March 2022. The said amendment was introduced in order to amend the existing Limited Liability Partnership Rules, 2009. The same shall come into force on the date of its publication in the Official Gazette. Major Amendments introduced in LLP (Second Amendment) Rules, 2022 5 Designated Partners instead of 2 without DIN The major amendment introduced via Limited Liability Partnership (Second Amendment) Rules, 2022 is that now the application for allotment of DPIN shall be made by up to 5 individuals in Form FiLLiP. That means, now there can be 5 instead of 2 Designated Partners (without having DIN) at the time of Incorporation. This is a significant step towards easing the procedure of appointing more than two Designated Partners (not having DPIN/ DIN) subject to a maximum of 5 Designated Partners at the time of incorporation itself. Web-based process for LLP Formation All the forms of LLP have now become web-based. Just like the SPICe Plus Forms are for the Company formation, now an LLP Incorporation Process shall be done through web-based forms only. The second important change made in the process of LLP formation through this amendment is that now every LLP shall have to mandatorily mention Latitude and Longitude in the Address Block. The details of the Directors can be fetched from the Digi Locker Database. PAN and TAN along with LLP Incorporation It is stated in the notification that the Certificate of Incorporation of an LLP shall be issued in Form 16 by the Registrar. In the said Form 16, the Registrar shall mention the PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) issued by the Income Tax Department. This means that now the LLPs shall not have to apply for PAN and TAN separately but it will be included in the process of Incorporation of a Limited Liability Partnership itself, just like it is in the case of Companies. Hence, the LLPs shall be allotted their PAN and TAN along with the Certificate of Incorporation itself. Solvency Statements and Certificate of Truthfulness With the introduction of Limited Liability Partnership (Second Amendment) Rules, 2022, the Statement of Account and Solvency shall now be signed on behalf of the LLP by its an interim resolution professional or resolution professional, or liquidator or limited liability partnership administrator in case of a bankrupt entity, while earlier the Designated Partners in charge of compliance had to sign the Statement of Solvency. The amended rules also cover the requirement of filing a 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. Form 8 (Statement of Solvency and Annual Return) to include Contingent Liability reporting specifically. Other major Amendments For filing Consent of Partners, a web-based Form 9 shall be made available which earlier an offline format was to be signed. As a result of which the Digital Signature of all the Designated Partners instead of 1 as the earlier case, shall be required at the time of Incorporation of an LLP. Form 28 and Form 29 have been merged. As a result of which form 28 shall require to be filed for the Notice of (A) Alteration in the COI (Certificate of Incorporation or Registration) (B) Alteration in Names and Addresses of any of the person authorized to accept the service on behalf of foreign LLP. (C) Alteration in the principal place of business in India. (D) Cessation to have a place of business in India. Conclusion The Limited Liability Partnership (Second Amendment) Rules, 2022 is a welcome and significant move by the Ministry of Corporate Affairs. These changes will definitely help the businesses registering as LLPs to ease the process of Incorporation of an LLP. The said amendments are expected to be enforced from the 1st day of April 2022 or as on the date of publication of the same in the Official Gazette.