Ministry imposes stricter compliance for LLPs

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Stricter compliance for LLPs
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The Ministry of Corporate Affairs has implemented significant changes through the Limited Liability Partnership (Third Amendment) Rules, 2023. Effective from the notification date of 27 October 2023, these amendments bring crucial alterations primarily centred around the maintenance of a comprehensive register of partners and the declaration of beneficial interests.

One of the key modifications introduced by the newly inserted provision, rule 22A, mandates limited liability partnerships (LLPs) to uphold a register of their partners in form 4A. For LLPs incorporated after the enactment of these rules, the requirement is immediate, starting from the date of their incorporation.

Existing LLPs are given a 30-day window to establish and maintain this register at their registered office. Details within this register encompass personal information of partners, their corporate identification numbers, asset information, contribution particulars, beneficial ownership and other pertinent data.

This amendment aligns with the existing obligation for companies, where a register of members is mandated under section 88 of the Companies Act, 2013, ensuring transparency and accountability.

Additionally, rule 22B necessitates individuals listed in the partner register without any beneficial interest in contributions to declare the actual benefactors within 30 days of their inclusion. Further, persons acquiring or holding a beneficial interest are required to submit a declaration in form 4C within the same timeframe.

On receiving declarations in forms 4B or 4C, LLPs are required to record these details in their partner register and file a return in form 4D with the Registrar of Companies within 30 days from receipt of the declaration.

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