Following
are some of the provisions:
1. Small LLP: It is proposed to create a class of LLP called as “Small LLP” in line with the concept of Small Companies. Such Small LLPs would be subject to lesser compliances, lesser fee or additional fee and lesser penalties in the event of default.
Earlier:
LLPs with contribution less than or equal to ₹25 lakh and turnover less than
₹40 lakh are treated as small LLPs
With the
passage of bill, ₹25 lakhs will go over to ₹5 crores and the turnover size will
be treated as ₹50 crores.
2. Non-convertible Debentures (NCDs): It
is proposed to allow LLPs to raise capital through issue of fully secured
Non-Convertible Debentures (NCDs) (as an alternative to equity participation)
from investors who are regulated by SEBI or RBI. This will help deepen the Debt
Market and enhance the capitalization of LLPs.
3. Section 69 has been amended with a view to
reduce the additional fee of Rs. 100 per day which is presently applicable for
the delayed filing of forms, documents.
4. LLP shall have only 22 Penal Provisions under
the LLP Act.
5. LLPs shall have only 7 Compoundable
Offences.
6. LLPs shall have only 3 Non-Compoundable
Offences.
7. The decriminalized cases will be shifted to
an “In-house Adjudication Mechanism” (IAM) which would help reduce the burden of
criminal courts.
8. Standards of Accounting and Auditing for
certain classes of LLPs may be prescribed by the Central Govt.
9. The maximum term of imprisonment has been
increased from 2 years to 5 years for any fraudulent activity.
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