Amendments applicable for Dec 22 exams

As per ICAI’s Amendments PDF and RTP Nov 22

CH 4 – Limited Liability Partnership Act, 2008

Newly Inserted Section

Small Limited Liability Partnership – Section 2(1)(ta)

It means a limited liability partnership –

(i) Contribution of which does not exceed ₹ 25 lakh or such higher amount, not
exceeding ₹ 5 crore, as may be prescribed; and
(ii) Turnover of which as per Statement of Accounts and Solvency for
immediately preceding financial year, does not exceed ₹ 40 lakh or such
higher amount, not exceeding ₹ 50 crore, as may be prescribed; or

Which meets other requirements as may be prescribed, and fulfills such terms
and conditions as may be prescribed.

Business – Definition

Section 2(1)(e) of the Limited Liability Partnership Act, 2008 defines business-
“Business” includes every trade, profession, service, and occupation except any
activity which the Central Government may, by notification, exclude.

Designated Partners (Section 7)

Section 2(1)(j) of the Limited Liability Partnership Act, 2008 defines

Designated Partner–

Any partner designated as such pursuant to section 7.

• Every LLP shall have at least 2 designated partners who are individuals
and at least one of them shall be a resident in India. [Section 7(1)]

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 • If in LLP, all the partners are bodies corporate or in which one or more
partners are individuals and bodies corporate, at least 2 individuals who
are partners of such LLP or nominees of such bodies corporate shall
act as designated partners.

• Resident in India – A person who has stayed in India for a period of not
less than 120 days during the financial year.

Example: There is an LLP by the name Indian Helicopters LLP having 5

partners namely Mr. A (Non-resident), Mr. B (Non-resident), Ms. C
(resident), Ms. D (resident) and Ms. E (resident).

In this case, at least 2 should be named as Designated Partner out of which

1 should be resident. Hence, if Mr. A and Mr. B are designated then it will
not serve the purpose. One of the designated partners should be there out
of Ms. C, Ms. D and Ms. E.

• Subject to the provisions of Sub-section(1),

➢ If the incorporation document,
▪ Specifies who are to be designated partners, such persons shall be
designated partners on incorporation; or
▪ States that each of the partners from time to time of LLP is to be
designated partner, every partner shall be a designated partner.
➢ Any partner may become a designated partner by and in accordance
with the LLP Agreement and a partner may cease to be a designated
partner in accordance with LLP agreement.

• An individual shall not become a designated partner in any limited liability

partnership unless he has given his prior consent to act as such to the
limited liability partnership in such form and manner as may be prescribed.

• Every limited liability partnership shall file with the Registrar the
particulars of every individual who has given his consent to act as
designated partner in such form and manner as may be prescribed within
thirty days of his appointment.

• An individual eligible to be a designated partner shall satisfy such

conditions and requirements as may be prescribed.

Every designated partner of a limited liability partnership shall obtain a

Designated Partners Identification Number (DPIN) from the Central

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Government and the provisions of sections 153 to 159 (both inclusive) of the
Companies Act, 2013 shall apply mutatis mutandis for the said purpose.

Registered office of LLP and change therein [Section 13] – Change in Penalty

Punishment for contravention – If the LLP contravenes any provisions of this

section, the LLP and its every partner shall be liable to a penalty of ₹ 500 per
day during which the default continues, subject to maximum of ₹ 50,000.

Name [Section 15]

• Every LLP shall have either the words “Limited Liability Partnership” or
the acronym “LLP” as the last words of its name.

• No LLP shall be registered by a name which, in the opinion of the

Central Government is—

✓ Undesirable, or

✓ Identical or too nearly resembles to that of any other LLP or

company or a registered trademark of any other person under the
Trade Marks Act, 1999.

Change of name of LLP [Section 17]

• If through inadvertence or otherwise, a LLP on its first registration or on

its registration by a new body corporate, is registered by a name–

Identical with or too nearly resembles

➔ name of any other LLP or company, or

➔ a registered trade mark of a proprietor under the Trade Marks Act,
1999, as is likely to be mistaken for it,

then on an application of such LLP or proprietor or a company,

the Central Government (CG) may direct such LLP to change its name.

• The LLP shall comply with such direction within 3 months from the date
of issue of such direction.

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 • An application of the proprietor of the registered trade mark shall be
maintainable within a period of 3 years from the date of incorporation or
registration or change of name of the LLP under this Act.

• Where LLP changes its name or obtains a new name, it shall within a period
of 15 days from the date of such change, give notice of the change to
Registrar along with the order of the Central Government, who shall carry
out necessary changes in the certificate of incorporation and within 30
days of such change in the certificate of incorporation, such LLP shall
change its name in the LLP agreement.

• If the LLP defaults in complying with direction of the CG, the CG shall allot
a new name to the LLP in such manner as may be prescribed and
Registrar shall enter the new name in the register of LLP and issue a fresh
Certificate of Incorporation.

The LLP can subsequently change its name in accordance with the provisions of
Section 16.

Registration of changes in partners [Section 25] – Change in Penalty

• Punishment for contravention –

Penalty
Contravention of Sec 25(2) – LLP & Designated Partner ₹ 10,000
Contravention of Sec 25(1) – Partner ₹ 10,000

Unlimited liability in case of fraud [Section 30] – Change in Term of

Imprisonment

1. Every person who was knowingly a party to the carrying on of the

business in the fraudulent manner or with the intention to defraud
shall be punishable with

✓ Imprisonment for a term which may extend to 5 years and

✓ Fine which shall not be less than ₹ 50,000 but which may extend to
₹ 5 lakhs.

2. Apart from the criminal proceedings which may arise, the LLP and
any such partner or designated partner or employee shall be liable to

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 pay compensation to any person who has suffered any loss or
damage by reason of such conduct.

However, such LLP shall not be liable if any such partner or designated partner or
employee has acted fraudulently without knowledge of LLP.

Maintenance of books of account, other records and audit, etc.

[Section 34] – Change in Penalty

➔ Penalty for failure to file Statement of Solvency with the Registrar-

LLP and Designated Partners – ₹ 100 per day during which the default continues
subject to maximum of ₹ 1,00,000 for LLP and ₹ 50,000 for designated partners.

➔ Fine in case of non-compliance with provisions of Sec 34(1), 34(2) and 34(4) –

LLP – Minimum Rs. 25,000 and Maximum – Rs. 5,00,000

Designated Partner – Minimum Rs. 10,000 and Maximum – Rs. 1,00,000

Annual return [Section 35] – Change in Penalty

Establishment of Special Courts (Section 67A) – Newly Inserted

(1) Central Government may, for the purpose of providing speedy trial of
offences under this Act, by notification, establish or designate as many Special
Courts as may be necessary for such area (s), as may be specified in notification.

(2) Special Court shall consist of—

(a) single judge holding office as Sessions Judge or Additional Sessions Judge,
in case of offences punishable under this Act with imprisonment of 3 years or
more; and

(b) Metropolitan Magistrate or a Judicial Magistrate of the first class, in

the case of other offences, who shall be appointed by Central Government
with concurrence of Chief Justice of the High Court:

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➔ Provided that until Special Courts are designated or established under sub-
section (1), the Courts designated as Special Courts in terms of section 435
of Companies Act, 2013 shall be deemed to be Special Courts for the
purpose of trial of offences punishable under this Act

Provided further that notwithstanding anything contained in the Code of Criminal

Procedure, 1973, any offence committed under this Act, which is triable by a
Special Court shall, until a Special Court is established under this Act or the
Companies Act, 2013, be tried by a Court of Sessions or the Court of Metropolitan
Magistrate or a Judicial Magistrate of the first class, as the case may be, exercising
jurisdiction over the area.]

Procedure and powers of Special Court (Section 67B) – Newly Inserted

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
all offences specified under section 67A(1) shall be triable only by the Special
Court established or designated for the area in which the registered office of the
LLP is situated in relation to which the offence is committed or where there are
more than one Special Courts for such area, by such one of them as may be
specified in this behalf by the High Court concerned.

(2) While trying an offence under this Act, a Special Court may also try an offence
other than an offence under this Act with which the accused may, under the
Code of Criminal Procedure, 1973 be charged at the same trial.

(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,

the Special Court may, if it thinks fit, try in a summary way any offence under
this Act which is punishable with imprisonment for a term not exceeding 3 years:

➔ Provided that in the case of any conviction in a summary trial, no sentence of

imprisonment for a term exceeding 1 year shall be passed
➔ Provided further that, when at commencement of or in course of a summary
trial, it appears to the Special Court that nature of the case is such that the
sentence of imprisonment for a term exceeding 1 year may have to be passed
or that it is, for any other reason, undesirable to try the case summarily, the
Special Court shall, after hearing the parties, record an order to that effect and
thereafter recall any witnesses who may have been examined and proceed to
hear or re- hear the case in accordance with the procedure for the regular trial.

Appeal and revision (Section 67C) – Newly Inserted

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The High Court may exercise, so far as may be applicable, all the powers
conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on
a High Court, as if a Special Court within the local limits of the jurisdiction of the
High Court were a Court of Sessions trying cases within the local limits of the
jurisdiction of the High Court.

Registration offices (Section 68A) – Newly Inserted

(1) For the purpose of

o exercising such powers and
o discharging such functions as are conferred on Central Government by
or under this Act or under rules made thereunder
o registration of LLPs under this Act,
Central Government shall, by notification, establish such number of registration
offices at such places as it thinks fit, specifying their jurisdiction.

(2) Central Government may appoint such Registrars, Additional Registrars, Joint
Registrars, Deputy Registrars and Assistant Registrars as it considers necessary,
for the registration of LLPs and discharge of various functions under this Act.

(3) Powers and duties of the Registrars and the terms and conditions of their
service shall be such as may be prescribed.

(4) Central Government may direct Registrar to prepare a seal or seals for the
authentication of documents required for, or connected with registration of LLP.

Payment of additional fee (Section 69)

If any document or return required to be filed or registered under this Act with
the Registrar is not filed or registered in time provided therein –

✓ It may be filed or registered after that time on payment of such additional

fee as may be prescribed in addition to any fee as is payable for filing of such
document or return,

✓ Such document or return shall be filed after due date of filing, without
prejudice to any other action or liability under this Act.

A different fee or additional fee may be prescribed for different classes of LLP or
for different documents or returns required to be filed under this Act or rules
made thereunder.

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