Govt tightens LLP rules; partners have to declare beneficial interests, intangible contributions
disclosure rules tougher for limited liability partnerships (LLPs), which will now be required to maintain a register of partners with details of their beneficial interests and both tangible and intangible contributions.
According to the Limited Liability Partnership (Third Amendment) Rules, 2023, notified by the Ministry of Corporate Affairs (MCA), even upcoming LLPs have to maintain such a register, at their registered offices, within 30 days of incorporation. The new rules came into force on October 28.
The move, aimed at improving transparency in the way LLPs operate in the country, comes just when a record number of companies and such partnership firms are getting incorporated this fiscal year.
The rules say the register of partners must have details of the amount and nature of their contributions, apart from basic professional and personal details, including office address, email ID and permanent account number.
The contributions must indicate their “tangible, intangible, movable, immovable or other benefit to the limited liability partnership, including money, promissory notes, other agreements to contribute cash or property, and contracts for services performed or to be performed, with monetary value and any other interest, if any”.
In case of any change, the entries in the register will have to be updated in seven days.
The new rules say a partner who does not hold any beneficial interest in contribution must state so in a filing with the LLP within 30 days of his name being featured in the register of partners.
At the same time, those who don’t feature in the register as partners but hold beneficial interests in contributions of the LLP must declare so in 30 days.
