The limited Liability Partnership (Amendment) Bill, 2021 which seeks to amend the 2008 Act has been passed by Lok Sabha on 9th August, 2021. An LLP is a corporate body which enjoys the best of partnership and company. A LLP enjoys the flexibility of the partnership as well as keeps the liability of the partners limited to the amount invested in the firm. An LLP is not affected by partners and can continue to function even if a partner leaves.  The current amendment focuses on encouraging start ups and facilitate ease of doing business. 

The main provisions of the bill are- 

Decriminalisation of offences- Under the amendment, several offences such as changes in partners of LLP, change in registered office, the arrangement of LLP and its creditors or partners, reconstruction or amalgamation of a LLP have been decriminalised. This means that violation of any of the above requirements would be countered only by a monetary penalty thereby easing the business conduction. Such a fine shall range between Rs 2000 to Rs 5 lakh. 

Introduction of small LLPs- The amendment introduces the concept of small LLPs. Earlier, in the LLPs with turnover of less than 40 Lakhs and partner contribution of less than 25 lakhs were given certain relaxations. Now this limit has been increased to 50 Crores and 5 crores respectively. 

Compounding of offences- A regional director or any official above this rank appointed by the central government has the authority to compound the offences that is punishable with a fine. However, if an offence compounded, it is not possible to compound a similar offence for the next three years. 

Special Courts- The amendment bill has provisions allowing establishment of special courts to proceed the trials in a speedy manner. The special court will include a sessions judge or additional session judge for the trials of offences punishable by imprisonment for three years and a metropolitan magistrate or a judicial magistrate for all other offences. The appeals against the special courts will lie against the High Court. 

Appellate Tribunals- The amendment states that all the appeals against the National Company Law Tribunal appeals except the ones passed with the consent of both the parties will lie in National Company law Appellate Tribunal (NCLAT). Such appeal must be filed within 60 days of the order. 

Standard of Accounting- According to the bill, Central government may prescribe the standards of accounting for various classes considering the advice of National Financial Reporting Authority. 

Punishment- In case of any fraudulent activity the maximum imprisonment period has been increased from 2 years to 5 years along with a fine that may extend up to 5 lakhs.

Change in name- Central government sometimes directs the LLPs to change its name due to it being identical to other LLP or for any other such reason. Earlier, non-compliance of the same attracted a fine. But now, the central government, instead of levying a fine, has the power to allot a name in such cases.