Key Insights on Limited Liability Partnership (Third Amendment) Rules, 2023

Sakshi Bhatt

November 6, 2023

Key Insights on Limited Liability Partnership (Third Amendment) Rules, 2023

The Ministry of Corporate Affairs (hereinafter referred to as “MCA or Ministry”) through its notification no. G.S.R. 803(E) dated October 27, 2023, has introduced Limited Liability Partnership (Third Amendment) Rules, 2023. These rules were introduced to amend the provisions of Limited Liability Partnership Rules, 2009. The key insights on the provisions of such rules are as follows:

Maintaining the Register of Partners

The MCA through its notification has mandated the Limited Liability Partnership (hereinafter referred to as “LLP”) to maintain a register of its partners in Form 4A. The register of partners shall be kept at the registered office of the LLP. It has been further added that in the case of existing LLPs, as on the date of commencement of Limited Liability Partnership (Third Amendment) Rules, 2023, such LLPs are required to maintain the register of partners in Form 4A within (30) days from the date of such commencement i.e., October 27, 2023.

1Further, sub-rule 1 of rule 22A states that the register of partners shall contain the following particulars, in respect of each partner, namely: –

  • name of the partner; address (registered office address in case the member is a body corporate); e-mail address; Permanent Account Number or Corporate Identification Number; Unique Identification Number, if any; father or mother or spouse’s name; occupation; status; Nationality; name and address of nominee.
  • date of becoming a partner.
  • date of cessation.
  • amount and nature of contribution (indicating tangible, intangible, movable, immovable, or other benefit to the limited liability partnership, including money, promissory notes, other agreements to contribute cash or property, and contracts for services performed or to be performed) with monetary value; and
  • any other interest, if any

In addition to the above, sub-rule 3 of rule 22A clarifies that the LLPs are required to make entries in the register of partners within a period of seven (7) days according to any change made in the contribution amount, or name and details of the partners in the limited liability partnership agreement, or cases of cessation of partnership interest. Furthermore, if any rectification is made in the register of partners under any order passed by the competent authority under any law, the necessary reference of such order shall be indicated in the respective register and for reasons to be recorded in writing.

Declaration in respect of a beneficial interest in any contribution

In the year 2022, the MCA has taken a significant step by making applicable certain provisions of the Companies Act 2013 on the LLPs. The Ministry through its notification number G.S.R. 110(E) made applicable the provisions of Section 90 of the Companies Act, 2013 related to the provisions of significant beneficial owners in a company. Now, the Ministry has introduced the manner of reporting of beneficial interest by registered partner, beneficial owner, and the LLP. The key insights on the provisions of beneficial interest in any contribution are as follows:

Filing of Form 4B by registered partner: Sub-rule 1 of rule 22B states that the registered partner, whose name is entered in the register of partners of LLP but does not hold any beneficial interest fully or partly in contribution, shall make a declaration in Form 4B within a period of thirty (30) days from the date on which his name is entered in the register of partners specifying the name and other particulars of the person who holds any beneficial interest in such contributions.

It has been further clarified by the Ministry that where any change occurs in the beneficial interest in such contribution, the registered partner shall make a declaration of such change to the LLP in Form 4B within a period of thirty (30) days from the date of such change.

Filing of Form 4C by beneficial partner: Sub-rule 2 of rule 22B states that the beneficial partner, who holds or acquires a beneficial interest in the contribution of an LLP but whose name is not registered in the register of partners, shall submit a declaration with LLP in Form 4C disclosing such interest with LLP within a period of thirty (30) days after acquiring such beneficial interest in the contribution of the LLP specifying the nature of his interest, particulars of the partner in whose name the contribution stand registered in the books of the LLP.

It has been further clarified by the Ministry that where any change occurs in the beneficial interest, the beneficial partner shall make a declaration of such change to the LLP in Form 4C within a period of thirty (30) days from the date of such change.

Filing of Form 4D by the LLP: Sub-rule 3 of rule 22B states that where any declaration(s) i.e. in Form 4B and Form 4C has been received by the LLP, then such LLP shall record such declaration in the register of partners and shall file, within a period of thirty (30) days from the date of receipt of declaration by it, a return in Form 4D to the Registrar in respect of such declaration with fees.

Designating responsible person: Sub-rule 3 of rule 22B states that every LLP shall specify a designated partner who shall be responsible for the furnishing of and extending cooperation for providing, information concerning beneficial interest in contribution in LLP to the Registrar or any other officer authorized by the Central Government and shall file information of such designated partner with the Registrar in Form 4.

It has been further clarified that until a designated partner is specified, every designated partner of the LLP shall be deemed to be responsible for furnishing and extending cooperation for providing, information with respect to a beneficial interest in contribution.

From the above provisions, it has been clarified that every LLP is required to file Form 4 for specifying a designated partner who shall be responsible for the information related to the beneficial interest in contribution in LLP to the authorities.

 

1The relevant information mentioned herein is sourced from notification no. G.S.R. 803(E) issued by the Ministry of Corporate Affairs on October 27, 2023

News

GET IN TOUCH WITH US TODAY

Contact Us Now

Awards & Recognitions


Cookies Consent

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below. Read more...

Cookies Consent

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below. Read more...