Lok Sabha Passes LLP (Amendment) Bill To Boost Ease Of Doing Business - (09 Aug 2021)

Commercial

Lok Sabha has passed the Limited Liability Partnership (Amendment) Bill, 2021 which seeks to encourage the start-up ecosystem and further boost the ease of doing business. After amendment for decriminalisation is approved, the total number of penal provisions in the Act will be reduced to 22, the number of compoundable offences will be only seven, the number of non-compoundable offences will be only three, and the number of defaults will be only 12.

The said Bill was first introduced on July 30, 2021 in Rajya Sabha and was passed on 4th August 2021. Subsequently, the Amendment Bill was introduced in lok sabha and was passed on 9th august 2021.

The Bill seeks to amend the Limited Liability Partnership Act, 2008 which provides for regulation of limited liability partnerships (LLP). LLP is an alternative corporate body entity to traditional partnership firms. Under LLP, a partner’s liabilities are limited to their investment in the business. The Bill converts certain offences into civil defaults and changes the nature of punishment for these offences.

The Bill empowers the government of India to create special courts for ensuring speedy trial of offences under the Act. These special courts will consist of a Sessions Judge or an Additional Sessions Judge, for offences punishable with imprisonment of three years or more and a Metropolitan Magistrate or a Judicial Magistrate, for other offences and these judges will be appointed with the concurrence of the Chief Justice of the High Court. The Appeals against orders passed by these special courts will lie before respective High Courts.

The appeals against the orders of the NCLT lie with the National Company Law Appellate Tribunal (NCLAT). The Bill further lays down that appeals cannot be made against an orders that have been passed with the consent of the parties. Limitation period for filing appeals is within 60 days (extendable by another 60 days) from the date of passing of order.

The Bill has amended Section 30 of the Act and has increased the maximum term of imprisonment from two years to five years. The amendment Bill seeks to give huge relief to people who were involved in Limited liability partnerships and were facing problems which resulted in introducing amendment Bill.

Tags : BILL AMENDMENT LLP