Report of the company law committee on decriminalization of the LLP act, 2008
January 20, 2021
The MCA has released the report of the Company Law Committee (‘CLC’) on decriminalization of the LLP Act, 2008. The CLC has made recommendations on decriminalization of certain compoundable offences under the Limited Liability Partnership Act, 2008 (the ‘Act’) and other changes to bring about ease of doing business for law abiding LLPs and also to align it with the provisions of the Companies Act 2013.
Specifically, the Report recommends decriminalisation of twelve compoundable offences and omission of one penal provision under the Act. It introduces the concept of a Small LLP, recommends provisions for issuance of Non-convertible Debentures (NCDs) by LLPs; relaxing of provisions relating to payment of additional fee for delayed filings and different fees for different classes of LLPs. It introduces a new Section 68A for establishing registration offices with specified jurisdiction and a new Section 77A for adjudication of penalties under an In-house Adjudication Mechanism. It also introduces an enabling provision to prescribe Accounting and Auditing Standards for a class or classes of LLPs.
The changes are expected to incentivise micro and small businesses to convert to bodies corporate such as LLPs. Comments to the Report are solicited by 2 February 2021.
To refer to the Report click here. To refer to our summary of the Report, click here.
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