The Centre is set to introduce a Bill in the monsoon session of Parliament to decriminalise minor and technical violations in the Limited Liability Partnership (LLP) Act, and give these business vehicles more borrowing flexibility.
The corporate affairs ministry is working on the Bill, based on suggestions given by a panel of experts led by secretary in the ministry Rajesh Verma. “The effort is to get the Bill ready for introduction in the monsoon session,” a person aware of discussions in the government said on the condition of anonymity.
The move signifies concerted efforts to bring to effect as quickly as possible all the planned legislative changes aimed at improving ease of doing business which the government hopes will add momentum to the economic recovery. The expert panel’s recommendations on LLP came as recently as January.
The idea is to decriminalize 12 offences that will be dealt with by an in-house adjudication mechanism rather than the NCLT. One offence related to non-compliance of tribunal orders will be dropped to avoid duplication.
The Bill is expected to offer relief on certain fees and penalty for defaults to small LLPs defined on the basis of their total contribution and sales. There is also a plan to introduce an accounting and auditing regime for LLPs. The Centre is also stepping up the compliance obligations of these entities to ensure that businesses do not shift to LLP form to escape their transparency and disclosure obligations
{{/usCountry}}The Bill is expected to offer relief on certain fees and penalty for defaults to small LLPs defined on the basis of their total contribution and sales. There is also a plan to introduce an accounting and auditing regime for LLPs. The Centre is also stepping up the compliance obligations of these entities to ensure that businesses do not shift to LLP form to escape their transparency and disclosure obligations
{{/usCountry}}