Good news for start-ups in India as Parliament passes the LLP Amendment Bill. The LLP Amendment Bill’s main focus is to boost start-ups in several ways. So, this is an important update for businesses in India. In this article, we will discuss Parliament passes the LLP Amendment Bill to boost start-ups in detail.
Parliament passes LLP Amendment Bill to boost start-ups
The Lok Sabha passed the LLP Amendment Bill on 9th August 2021. The LLP Amendment Bill encourages the start-up ecosystem and further boosts the ease of doing business.
The bill was passed through a voice vote. Furthermore, The bill was successfully passed despite facing objections from the opposition.
Finance Minister on LLP Amendment Bill
Nirmala Sitharaman, Finance Minister, stated it is a very significant measure and would bring enthusiasm to the LLP ecosystem.
Furthermore, She emphasised that the law will make conducting business easier. According to her, Illegal crimes will be reduced. As a result of the bill’s passing and the ease of conducting business would improve.
According to the bill, the idea of a small limited liability partnership would be introduced in line with the notion of a small company under the Companies Act of 2013.
Amendments in the LLP Bill
According to the bill, the idea of a small limited liability partnership would be introduced in line with the notion of a small company under the Companies Act of 2013.
Defined offences will be changed to civil defaults, and the type of punishment in certain parts will change from fines to monetary penalties. There are now 24 punitive provisions in the Act, 21 of which are compoundable and three of which are not.
To decrease the number of criminal provisions under the LLP Act to 22, seven compoundable offences, three non-compoundable offences, and 12 defaults that will be dealt with by the ‘In-House Adjudication Mechanism’ are included in the proposed law.
Outcomes as Parliament passes LLP Amendment Bill
As a result of the proposed change, Offences that relate to minor or less serious compliance issues, involving predominantly objective determinations, are proposed to be shifted to the In-House Adjudication Mechanism (IAM) framework instead of being treated as criminal offences.
Also, a new section 34A would allow the central government to impose “Accounting Standards” or “Auditing Standards” for certain kinds of limited liability partnerships.
Furthermore, Changes to the Act are being made for the first time. Therefore, existing limitations up to Rs 40 lakh in turnover and Rs 25 lakh in partner contributions have been relaxed. The criteria will be raised once the amendment is in effect.
Frequently Asked Questions on LLP- Limited Liability Partnership in India
Moreover, If you want any other guidance with respect to LLP Registration, please feel free to contact our business advisors at 8881-069-069.
Download E-Startup Mobile App and never miss the latest updates relating to your business.