The Cabinet, on 28th July 2021 approved amendments to the LLP Act, 2008 vide LLP Amendment Act, 2021. These amendments to the LLP Act were suggested in Union Budget 2021, presented by FM Nirmala Sitharaman in the parliament on 1st February 2021.
While presenting the amendments, FM said “With the Limited Liability Partnership Amendment Bill, we will have only 22 penal provisions, 7 compoundable offences and 3 non-compoundable offences". Thus, 12 offences will be decriminalised for LLPs and three sections will be omitted.
She further added, "A lot of changes are being made in the Companies Act, decriminalizing many sections and improving ease of doing business for companies. A similar treatment had to be given for LLPs".
KEY POINTS HIGHLIGHTED
- Ease of doing business
- Making the LLP model attractive for startups
- To boost Atmanirbhar Bharat
- 12 offences to be decriminalized
- New Definition of LLP will be introduced
- Expansion of scope for small LLPs