LLP (Third Amendment) Rules, 2023: Register of Partner & SBO Provisions

The LLP (third amendment) Rule, 2023 come into force for vital changes to the regulatory structure governing Limited Liability Partnerships (LLPs) in India. There is one of the important provisions pertains to the Register of Partners and Significant Beneficial Ownership (SBO). The provisions aim is to enhance transparency, corporate governance, and accountability within LLP SBO rules 2023, which is aligning with world’s best practices and regulatory standards. In this article we will offer you the LLP (Third Amendment) Rules, 2023: Register of partner & SBO provisions.

Rule 22A Register of Partners

• The register of partners refers to every limited liability partnership shall begin from the incorporation date of the company. The Form 4A is maintaining a Register of their partners that shall be kept at the registered office of the Limited Liability Partnership:

Applicability for Newly incorporated LLP SBO Rules

As per the Rule 22A of the provision, a LLP is formed subsequent to the date on the amendment rules came into existence. It is needed to maintain a register of their partners in Form 4A, from the incorporation date itself.

There are certain particulars, which are required to be in register of partners, in case of each partner:

• Partner’s name, address of registered office if any member is body corporate; Corporate Identification Number or PAN, e-mail; Unique identification number; nationality; status; in case any; father or mother or spouse’s mention name; and also mention the details about nominee;
• Cessation date;
• Date of becoming partner;
•  Nature and amount of contribution (such as movable, tangible, immovable, intangible and other benefit to the LLP, such as promissory notes, money, agreements to have property or cash, and service contracts performed or will be performed with monetary value; and
• Other interest, if have any.

Applicability for existing LLP SBO Rules 2023

In Form 4A the register of partners has maintained the certain rules at the time of every LLP existing on the commencement date, and within 30 days of commencement of the amendment rules.

Reporting of amendment in entries made in the Registers

The reporting of amendment in entries have made in the registers:

• If any changes have been made in the contribution, like contact details and names of the partners in LLP agreement, or the partnership terminated shall be reported by registering the change in the Register within 7 days of the said change.
• LLP creates any corrections to the register keep under the said rule in response to an order issued by an appropriate authority under law. The relevant register must have written justification for the correction along with the necessary reference to the order.

Rule 22B Declaration in case of beneficial interest in any contribution

• A person’s name on a LLP’s register of partners, but who does not have whole or in part, hold any beneficial interest in any contribution known as the registered partner must within 30 days of the date on that his name appears in the register of partners. To file the LLP a declaration to that effect in Form 4B that must involve the name and other information of the person, which actually holds any beneficial interest in such circumstances:

In case the beneficial owner in LLPs interest in such contribution changes, the registered partner shall inform the LLP in Form 4B of the amendment within 30 days from the date of such amendment has been taken place.

• In the contribution of a LLP, the beneficial owner in LLPs interest has acquired a person whose name is not listed in the register of partners, who also known as “the beneficial partner” must file a declaration of such interest in Form 4C with the LLP within thirty days of doing so. The Form shall mention the partner’s information, nature of their interest in whose name the contribution is registered in the LLP’s books.

The beneficial owner in LLP interest in contribution changes, the registered partner must inform the LLP by Form 4C of the Change within 30 days from such change occurred. 

Furthermore, a registered partner will not have duty to file such declaration, in case his beneficial owner in LLPs interest in a contribution is restricted to the amount listed against the name in the register of partners. One cannot hold any beneficial owner in LLPs interest in a contribution against any other registered partner.

• If any declaration received by LLP Act as per provision of sub-rule (1) or (2) shall be recorded in the partner’s register and must file Form 4D return to the registrar with any applicable fees within 30 days of declaration receiving.
• All LLPs must have a name of designated partner who will be obliged of providing details regarding the beneficial interest in contributions created by the partnership to the Registrar or any other officer authorized by the Central government. In Form 4 the designated partners contain must be filled with the registrar.

Each designated partner is considered as an accountable for giving detail regarding a beneficial interest in contribution under the sub-rule and for co-operating in doing so until a designated partner is named as per sub-rule 4.

As per the recent rules of LLP (Third Amendment) Rules, 2023, the provisions of Rule 22A and 22B introduced by MCA will assist LLPs in managing transparency and clarity in their compliance with Law. The primary benefit of this rule is that all the details will be given at once, it leads to save time, any amendments to the detail will be recorded in a single register. 

End Notes

Through the above-mentioned information, we can say that the LLP (Third Amendment) Rules, 2023 comes up with the significant changes about the Register of Partners and LLP SBOs rules provisions operating in India. These amendments lead to accountability, transparency, and regulatory compliance within LLPs Act. The need to manage a Registrar of Partners makes sure that appropriate and up-to-date detail about the ownership framework of the LLP is readily available. It helps in encouraging transparency and stakeholders include the regulatory authorities, to review the ownership information of the LLP efficiently.