The Cabinet on Wednesday approved amendments to the Limited Liability Partnership (LLP) Act, including de-criminalizing 12 offences under the law. Besides, a new definition for small LLPs will be introduced under the amended Act, which is being implemented by the corporate affairs ministry. The Union Cabinet on Wednesday cleared the amendments to the LLP Act.
This will be the first time that changes are being made to the Act since it came into effect in 2009. Finance Minister Nirmala Sitharaman said that a lot of changes have been done in the Companies Act, 2013 in terms of ease of doing business and similar treatment has to be given to LLPs since "LLPs are among more popular amongst startups".
Currently, there are 24 penal provisions and 21 are compoundable offences, while 3 are non-compoundable ones. With the proposed amendments, the total number of penal provisions under the LLP Act will be reduced to 22, compoundable offences will be 7, non-compoundable offences will be 3 and the number of defaults to be dealt under the In-House Adjudication Mechanism (IAM) will be only 12, the minister said. "So, a total of 12 offences are to be de-criminalized for LLPs.
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