The Limited Liability Partnership (Amendment) Rules, 2022

No Comments

Limited Liability Partnership Amendment Rules 2022

The Limited Liability Partnership (Amendment) Rules, 2022 have been published by the government. Further, Rules 5, 18, 19, and 37 have been amended. Moreover, new regulations are introduced regarding the allotment of a new name to an existing LLP under Section 17 (3), the adjudication of penalties, the appeal against the order of the adjudicating officer, the registration of the appeal, and the disposition of the appeal by the Regional Director. In addition, two additional forms, Form 16A and Form 33, have been made available. The fee requirements for LLP were also amended by CG by replacing the current Annexure A. Let us discuss these amendments in detail in this Article.

Before we proceed towards the above-mentioned amendments let us first understand The Limited Liability Partnership (LLP).

Table of Contents:

Limited Liability Partnership (LLP)

LLP is a type of alternative corporate business structure that combines the benefits of a company’s limited liability with the flexibility of a partnership. The LLP can continue to exist even if the partners change. It has the ability to engage in contracts and possess property in its own name. The LLP is a separate legal entity that is accountable for the full amount of its assets, but the partners’ responsibility is limited to their agreed-upon contribution to the LLP. Furthermore, no partner is accountable for the autonomous or unauthorized activities of other partners; therefore individual partners are protected from joint responsibility resulting from another partner’s unlawful business choices or wrongdoing.

The mutual rights and obligations of the partners in an LLP are controlled by an agreement between the partners or, in the case of an LLP, between the partners and the LLP. The LLP, on the other hand, is not exempt from accountability for its other duties as a distinct business. Because an LLP incorporates features of both a “corporate structure” and a “partnership firm structure,” it is referred to as a “hybrid” between a corporation and a partnership.

The Amendments 

By revising the Limited Liability Partnership Rules, 2009, the Ministry of Corporate Affairs (MCA) has notified the Limited Liability Partnership (Amendment) Rules, 2022 in a Notification dated 11th February 2022. The LLP (Amendment) Rules, 2022 will go into effect on April 1, 2022.

New regulations are introduced under Section 17 (3) for the allotment of a new name to an existing LLP, adjudication of penalties, and appeal against the decision of adjudicating officer, registration of appeal, and disposition of the appeal by the Regional Director. In addition, two new forms, Form 16A and Form 33 CG, as well as amended fee standards for LLP, were announced.

Abstract of Amendments

Rule 5 (Fees), 18, and 19 of the Limited Liability Partnership (Amendment) Rules, 2022 have been changed. The following regulations were added as a result of this new rule.

  • Rule 19A – Allotment of a new name to an existing LLP under section 17 sub-section (3)
  • The Rule 37A – Penalty adjudication.
  • Rule 37B – Appeal from adjudicating officer’s order Rule 
  • 37C – Registration of appeal Rule 
  • 37D – Disposition of appeal by Regional Director

Through the Limited Liability Partnership (Amendment) Rules, 2022, MCA also notified the following forms:

  • New Forms- FORM NO. 16A – Certificate of Incorporation with Change of Name Due to Noncompliance with Order of Regional Director.
  • FORM NO. 33 – LLP ADJ – Appeal Memorandum.

Brief Explanation of the Amendments

  • Amendment to Rule 19 (1) of the LLP Rules, 2009: The Limited Liability Partnership (Amendment) Rules, 2022 changed Rule 19 and replaced it with a sub-rule (1).A limited liability partnership, a company, or the owner of a registered trademark under the Trade Marks Act, 1999 (47 of 1999) that already has a name or trademark that is similar to or too nearly resembles the name or new name of a limited liability partnership incorporated later may apply to the Regional Director in Form 23 to give a direction to that limited liability partnership incorporated later.The holder of a registered trademark must file an application within three years after the date of the limited liability partnership’s formation, registration, or name change under the Act.
  • The Rule 19A – Allotment of a new name to an existing LLP under section 17 sub-section (3): As previously stated, the MCA has established new regulation 19A, which allows an existing LLP to be given a new name under Section 17(3) of the LLP Act, 2008.If an LLP does not change its name within three months after receiving directions under Section 17(1) of the LLP Act, the new name of the LLP will be a combination of the following:
    • The letters ‘ORDNC’ are a combination of the letters ‘ORDNC’ and ‘ (Order of Regional Director Not Complied)
    •  The year in which the direction was passed
    •  Identification number
    •  LLPINs that already exist
    •  LLP Incorporation Certificate – New Form 16A

    The Registrar of Companies will update the LLP register with the new name and issue a new Form 16A certificate of LLP incorporation.

    For your convenience, below is a copy of the new Form 16A and Form 33 – LLP ADJ:

    On official correspondence, bills, and publications, LLPs whose names have been altered by the Registrar of Companies shall follow Section 21 of the LLP Act and include the phrase ‘Order of Regional Director Not Complied (under section 17 of the LLP Act, 2008)’ underneath their name.

    Note that if the LLP later changes its name in accordance with Section 19 of the LLP Act, no such disclosure is required.

  • Rule 37A – Penalty adjudication: LLP penalties are now adjudicated under the new regulation 37A. For adjudicating penalties under the LLP Act, the Central Government can select any officer, not below the level of Registrar as adjudicating officers.After issuing notice and hearing the LLP’s concerned person, the adjudicating officer might issue a penalty order against the LLP. Further, the order copy will be sent to the LLP’s partner/designated partner and the regional director by the adjudicating officer. Moreover, the penalty must be paid solely through the MCA portal by the LLP.
  • The Rule 37B – Appeal from adjudicating officer’s order Rule : Within 60 days following the adjudicating officer’s order, the LLP can file an appeal in form 33 – LLP ADJ, stating the reasons for the appeal.
  • Rule 37C – Registration of appeal Rule : When the appeal is complete, the regional director’s office will register it and assign it a serial number. Moreover, the regional director will provide notice to the adjudicating director whose order is being appealed.
  • 37D – Disposition of appeal by Regional Director: The regional director will hear both sides of the appeal and issue a written decision. Further, The adjudicating officer, the appellant (LLP that filed the appeal), and the Central Government shall be notified of the regional director’s decision.

Amendments in the Fees for LLPs

The Limited Liability Partnership (Amendment) Rules, 2022, also replaced the current Annexure A with revised fee requirements for LLPs.

  • Fees Applicable for LLP Registration: The charge for registering a Limited Liability Partnership, as well as converting a business, a private company, or an unlisted public company into a Limited Liability Partnership, is announced in the (Amendment) Rules, 2022 below:
Sr. No.                                               LLP Contribution Fees Applicable
1. Limited Liability Partnerships (LLPs) with a contribution of less than Rs. 1 lakh Rs. 500
2. Limited Liability Partnership (LLP) with a contribution of more than Rs. 1 lakh but less than Rs. 5 lakhs Rs. 2,000
3. Limited Liability Partnership (LLP) with a contribution of more than Rs. 5 lakhs but less than Rs. 10 lakhs Rs. 4,000
4. Limited Liability Partnership (LLP) with a contribution of more than Rs. 10 lakhs but less than Rs. 25 lakhs Rs. 5,000
5. Limited Liability Partnership (LLP) with a contribution of more than Rs. 25 lakhs but less than Rs. 1 crore Rs. 10,000
6. Limited Liability Partnerships with a donation of more than one crore rupees  Rs. 25,000

 

  • Fees Applicable for filing LLP Forms: Fees that apply For filing, registering, or recording any document, form, statement, notice, Statement of Accounts and Solvency, annual return, and application for conversion of a firm, a private company, or an unlisted public company into an LLP required or authorised to be filed, registered, or recorded by the Act or by these rules:
Sr. No.                                               LLP Contribution Fees Applicable
1. Limited Liability Partnerships (LLPs) with a contribution of less than Rs. 1 lakh Rs. 50
2. Limited Liability Partnership (LLP) with a contribution of more than Rs. 1 lakh but less than Rs. 5 lakhs Rs. 100
3. Limited Liability Partnership (LLP) with a contribution of more than Rs. 5 lakhs but less than Rs. 10 lakhs Rs. 150
4. Limited Liability Partnership (LLP) with a contribution of more than Rs. 10 lakhs but less than Rs. 25 lakhs Rs. 200
5. Limited Liability Partnership (LLP) with a contribution of more than Rs. 25 lakhs but less than Rs. 1 crore Rs. 400
6. Limited Liability Partnerships with a donation of more than one crore rupees  Rs. 600

 

  • Fees Applicable for Recording of Appointment of a Partner: In LLP Form No. 4, there is a fee for submitting, registering, or recording notice of appointment, cessation, change of name, address, designation of a partner or designated partner, intimation of Designated Partner Identification Number, and agreement to become a partner or designated partner.
Sr. Number Type of LLP Applicable Fees
1. For Small LLP Rs. 50
2. For other LLPs other than Small Rs. 150

 

  • Fees Applicable for Conversion of Firm into LLPs: Fees for all applications save those for converting a firm, a private company, or an unlisted public corporation into an LLP are as follows:
Sr. Number Application Small LLPs LLPs other than Small
1. For a name reservation under section 16 of the Act Rs. 200 Rs. 200
2. For a name change direction under section 17 of the Act Rs. 5000 Rs. 5000
3. For the name of a defunct Limited Liability Partnership to be struck off under rule 37 of the Act Rs. 500 Rs. 500

 

  • Fees Applicable for an application under Rule 18(3)
Sr. No.                                               Application Type Fees Applicable
1. Application for a name reservation under Rule 18 (3) Rs. 10,000
2. Renewal of a person’s name under Rule 18 (3) Rs. 5,000

 

  • Fee for document inspection or getting a certified copy
Sr. No.                                               Application Type Fees Applicable
1. Under section 36, an LLP’s documentation may be inspected. Rs. 50
2. Registrar must certify a copy or extract of any document under section 36. Rs. 5/- per page (or fraction of a page)

 

  • Any form filed by a foreign limited liability partnership is subject to a fee: Fee for filing any form including
    • Statement of Accounts and Solvency, 
    • Notification, or 
    • Document by a foreign limited liability partnership.
S. No.                                               Application Type Fees Applicable
1. To file a document pursuant to Rule 34 (1) Rs. 5,000
2. Any other form, account or solvency statement, notification, or document Rs. 1,000

 

An additional cost will be charged if the LLP forms are not filed on time on the below-mentioned rates

S. No.  Period of Delay Small LLPs LLPs other than Small
1. Upto 15 Days 1 * Normal filing fees 1* Normal filing fees
2. From 15 – 30 Days 2* Normal filing fees 4*Normal filing fees
3. From 30 – 60 Days 4* Normal filing fees 8*Normal filing fees
4. From 60 – 90 Days 6* Normal filing fees 12*Normal filing fees
5. From 90 – 180 Days 10* Normal filing fees 20*Normal filing fees
6. From 180- 360 

Beyond 360

15* Normal filing fees

 & 

For forms other than Forms 8 and 11, the filing charge is 25 times the standard filing fee. For Forms 8 and 11, the filing charge is 15 times the standard filing price plus Rs. 10 per day for each day of delay over 360 days.

30* Normal filing fees

 &

For forms other than Forms 8 and 11, the filing charge is 50 times the standard filing fee. For Forms 8 and 11, the filing price is 30 times the standard filing fee plus Rs. 20 per day for each day that the delay exceeds 360 days.

 Register your LLP starting at Just ₹ 6,500/- only

Takeaway

From the above amendments, it can be concluded that these changes will not only change the internal mechanism of the LLPs but also provide them a path which helps them in achieving goals and moreover, it helps the government to look after the working of these companies.

For more information about The Limited Liability Partnership (Amendment) Rules, 2022, kindly contact our Experts.

CS Urvashi Jain is an associate member of the Institute of Company Secretaries of India. Her expertise, inter-alia, is in regulatory approvals, licenses, registrations for any organization set up in India. She posse’s good exposure to compliance management system, legal due diligence, drafting and vetting of various legal agreements. She has good command in drafting manuals, blogs, guides, interpretations and providing opinions on the different core areas of companies act, intellectual properties and taxation.

About us

LegalWindow.in is a professional technology driven platform of multidisciplined experts like CA/CS/Lawyers spanning with an aim to provide concrete solution to individuals, start-ups and other business organisation by maximising their growth at an affordable cost.

Ask an Expert

More from our blog