Limited Liability Partnership Amendment rules,2022

Last Updated On: March 29, 2022, 10:38 a.m.
...

LIMITED LIABILITY PARTNERSHIP (LLP) AMENDMENT RULES, 2022

The Ministry of Corporate Affairs (MCA) amended the Limited Liability Partnership Rules, 2009 vide a notification dated 11 February 2022 and inserted new rules concerning the Limited Liability Partnerships (LLPs). The amended rules, i.e. the Limited Liability Partnership (Amendment) Rules, 2022, will be effective from 1 April 2022. The LLP (Amendment) Rules also added two new forms, i.e. Form 16A and Form 33 LLP – ADJ, and revised fee norms for LLPs.

 

In this article, let us understand all  the LLP amendments rules:

 

I.Adjudication of LLP Penalties

The Limited Liability Partnership (Amendment) Rules, 2022 inserted new Rules 37A, 37B, 37C, and 37D that provide regarding the adjudication of penalties of an LLP.

What is Adjudicating of Penalty?

Adjudication of Penalty under the Companies Act means the official imposing of penalty as prescribed under the respective sections of the Companies Act on the Company and its officers by the designated officer of the Ministry of Corporate Affairs.

 

Insertion of new rules:

i. Rule 37A: Adjudicating Officer

The new Rule 37A provides that the Central Government will appoint any officer, not below the rank of a Registrar as the adjudicating officer for adjudicating penalty under the LLP Act. The adjudicating officer will issue a written notice to an LLP, partner, designated partner of an LLP, or any other person who has defaulted or committed non-compliance under the LLP Act before adjudicating a penalty

The notice will specify the period (not less than 15 days but not more than 30 days) within which the notice receiver should show cause why the penalty should not be imposed. The notice issued will also clearly specify the nature of default or non-compliance alleged to have been committed, relevant penal provisions, and the maximum penalty that can be imposed on the LLP, partner, designated partner of an LLP, or any other person under the LLP Act.

The LLP, partner, designated partner of an LLP, or any other person should reply to the notice only in electronic mode. The adjudicating officer can extend the period provided in the notice for replying/show causing by a further period not exceeding 15 days. The adjudicating officer can extend the period of notice when the LLP, partner, designated partner of an LLP, or any other person shows sufficient cause for not responding to the notice after recording the reasons in writing. 

 

ii.37B: Appeal against order of Adjudicating officer

The new Rule 37B  provides that the person against whom the adjudicating officer passes an order of penalty (aggrieved party) can file an appeal against such order with the Regional Director having jurisdiction in the matter. The aggrieved party must file the appeal within 60 days from the date of receiving the order copy in Form 33 – LLP ADJ. 

The appeal must set forth the grounds for appealing and be accompanied by a certified copy of the order. It should also be accompanied by a fee of Rs.1,000 in the case of Small LLPs and Rs.2,500 in the case of other than Small LLPs.

 

iii. 37C: Registration of Appeal

The new Rule 37C  provides that the office of the Regional Director will endorse the appeal date and sign such endorsement upon receipt of an appeal. The appeal will be registered and given a serial number if it is found to be in order after scrutiny.

When the appeal is found defective by the Regional Director, he/she can grant time to rectify the defects in the appeal. The Regional Director can grant time not being less than 14 days from the date of intimating the defects to the appellant. When the appellant fails to rectify the defect within the specified time, the Regional Director will decline to register the appeal through an order.

 

iv. 37D: Disposal of Appeal by the Regional Director

The new Rule 37D states that upon the admission of the appeal, the Regional Director will give the appeal copy to the adjudicating officer against whose order the appeal is filed. He/she will also issue a notice to the adjudicating officer to file a reply within the period specified in the notice which is not exceeding 21 days.

 

 

II. Revised Fee:

The Limited Liability Partnership (Amendment) Rules, 2022 revised the LLP fee norms by substituting the Annexure A of the LLP Rules, 2009.

The Amendment Act provides that the penalty payable for non-compliance of the LLP Act by a Small LLP or a Start-Up LLP or by its partner or designated partner shall be one-half of the penalty specified, subject to a maximum of INR 1,00,000 for limited liability partnership and INR 50,000 for every partner or designated partner or any other person, as the case may be.

 

ABOUT LEGAL SUVIDHA

Copyright © 2013-2021 - All Right Reserved