Last updated: June 9th, 2023 7:37 PM

Limited Liability Partnership (Second Amendment) Rules, 2022

The Ministry of Corporate Affairs (MCA) vides its Notification dated 04th March 2022 has notified Limited Liability Partnership (Second Amendment) Rules, 2022 to further amend the existing Limited Liability Partnership Rules, 2009. The modified rules focus on the real-time capturing of the information and promote ease of doing business.

The LLP (Second Amendment) Rules 2022 primarily deal with solvency statements and certificates of truthfulness, which are part of the annual returns. New rules concerning the LLP are expected to be enforced from the 1st day of April 2022 or as on the date of publication of the same in the Official Gazette.

Synopsis of LLP Second Amendment Rules, 2022

Major amendments notified vide the Limited Liability Partnership (Second Amendment) Rules is as follows:

• There can be 5 Designated partners (without having DIN) at the time of Incorporation. (Earlier 2 was allowed)
• PAN & TAN will be allotted along with Certificate of Incorporation or Registration
• LLP incorporation has become web-based like the SPICE+.
• Form 8 (Statement of Solvency and Annual Return) will also include disclosures concerning Contingent Liability
• All LLP forms will be web-based including LLP Form -9  – Consent of Partners. Resultantly, all Designated Partners Digital Signatures will be required.

The amendment provides a revised process for the insolvency resolution process of LLPs. Further, the provisions are added regarding the signing of statements of accounts and solvency and the Annual Return of LLPs under insolvency. The official Notification of MCA is attached here for reference:

5 Designated Partners without DIN at the time of Incorporation – Substitution of Rule 11(1)

As stated above, the major amendment introduced via Limited Liability Partnership (Second Amendment) Rules, 2022 is that now the application for allotment of DPIN shall be made by up to 5 individuals in Form FiLLiP. That means, now there can be 5 Designated Partners instead of 2 Designated Partners (without having DIN) at the time of Incorporation. This is a great step towards easing the procedure of appointing more than two DPs (not having DPIN/ DIN) subject to a maximum of five DPs at the time of incorporation itself.

PAN and TAN along with LLP Incorporation – Insertion of Rule 11(3)

According to Rule 11(3) of Limited Liability Partnership (Second Amendment) Rules, 2022,  The Certificate of Incorporation of limited liability partnership shall be issued by the Registrar in Form 16 and shall mention Permanent Account Number and Tax Deduction Account Number issued by the Income Tax Department. Until now, the LLPs were required to apply for PAN and TAN separately and were not included in the LLP process of incorporation like in the case of Companies wherein PAN and TAN application is a part of SPICE +. Post to this amendment, PAN and TAN shall be allotted to LLPs with the Certificate of Incorporation or Registration itself.

Revised Process for insolvency resolution process of LLPs

Substitution: Rule 24(6) and Insertion of Rule 25(2) proviso As stated above, Limited Liability Partnership (Second Amendment) Rules, 2022 provides a revised process for the insolvency resolution process of LLPs with the Substitution: Rule 24(6) and Insertion of Rule 25(2). With the introduction of Limited Liability Partnership (Second Amendment) Rules, 2022, the Statement of Account and Solvency shall now be signed on behalf of the LLP by its an interim resolution professional or resolution professional, or liquidator or limited liability partnership administrator in case of a bankrupt entity, while earlier the Designated Partners in charge of compliance had to sign the Statement of Solvency.

• The amended rules also cover the requirement of filing a Certificate of Truthfulness and Correctness of Annual Returns of LLPs with the sales of up to INR 5 Crore or Partner’s Contribution up to INR 50 Lakhs.
• Form 8 (Statement of Solvency and Annual Return) has been introduced to include Contingent Liability reporting specifically.

Web-based process for LLP Incorporation

As mentioned above Just like the SPICe Plus Forms are for the Company formation All the forms of LLP Incorporation have now become web-based, vide the Limited Liability Partnership (Second Amendment) Rules, 2022.

• The second important change made in the process of LLP formation through this amendment is that now every LLP shall have to mandatorily mention Latitude and Longitude in the Address Block.
• The details of the Directors can be fetched from the Digi Locker Database.

Substitution: Rule 19(4)

Rule 19(4)   of LLP Rules provides “The person making the application shall attach a copy of the incorporation certificate of the limited liability partnership or the company or the registration certificate of the entity, as the case may be”. Vide Liability Partnership (Second Amendment) Rules, 2022, the requirement of attaching the authority under which such person is making an application under Rule 19 is taken down.

Form 29 is merged into Form 28

As per the Liability Partnership (Second Amendment) Rules, 2022, the LLP Form 29 is merged into Form 28. Form 29 was filed for the following purposes:

• Notice of alteration in the certificate of incorporation or registration
• Notice of alteration in names and addresses of any of the persons authorized to accept service on behalf of a foreign limited liability partnership (FLLP)
• Notice of alteration in the principal place of business in India of FLLP
• Notice of cessation to have a place of business in India

Other Amendments

According to Liability Partnership (Second Amendment) Rules, 2022, Rule 36(6) has been introduced. The rule specifies that Reply to the Registrar under Rule 36(6) shall be given in form 32 Apart from the above, the following forms are also amended:

• Form RUN LLP - Reserve Unique Name-Limited Liability Partnership
• Form FiLLiP (Form for incorporation of Limited Liability Partnership)
• Form 3 - Form 3 is required to be filed for Information concerning the limited liability partnership agreement and changes, if any, made therein.
• Form 4 - Form 4 is required to be filed for every appointment, cessation, and change in name/address/designation of a designated partner or partner.
• Form 5 - Notice for change of name
• Form 8 - Statement of Account & Solvency. Now, Form 8  will specifically include Contingent Liability reporting;
• Form 9 – Consent to act as Designated Partner. As Form 9 has become web-based, resultantly, all Designated Partner’s Digital Signatures will be required at the time of Incorporation of LLP
• Form 11 -  LLP Annual return Form
• Form 12 - Form for intimating other address for service of a document - Place of maintenance of Accounts other than Registered office of LLP where service of notice can be made is notified shall be intimated in Form 12
• Form 15 - This form is to be filed with Registrar within 30 days of the resolution passed from where the LLP proposes to shift its registered office
• Form 16 - Form 16 is a form issued by employers to salaried individuals in India
• LLP   Form 17 - Conversion of Partnership to LLP
• Form 18 - Conversion of Private Limited Company into LLP
• Form 22 - Notice of intimation of Order of Court / Tribunal / CLB / Central Government to the Registrar
• Form 23 - Application for direction to Limited Liability Partnership (LLP) to change its name to the Registrar
• Form 24 - Application to the Registrar for striking off the name
• Form 25 - Application for reservation/renewal of name by a Foreign Limited Liability Partnership (FLLP) or Foreign Company
• Form 27 - Form for registration of particulars by Foreign Limited Liability Partnership (FLLP)
• Form 28 - Return of alteration in the incorporation document or other instrument constituting or defining the constitution; or the registered or principal office; or the partner or designated partner of limited liability partnership incorporated or registered outside India
• Form 31 - Application for compounding of an offense under the Act
• Form 32 - Form for filing addendum for rectification of defects or incompleteness