Decriminalising various offences, introducing a new concept of small LLPs and permitting LLPs to issue non-convertible debentures are among the changes being proposed under the Limited Liability Partnership (LLP) Act.
As part of efforts to further improve the ease of doing business, the corporate affairs ministry has sought comments on the recommendations of a high-level committee regarding the LLP Act.
The ministry had set up the Company Law Committee in September 2019.
After studying the existing framework under the LLP Act, the panel has suggested decriminalising 12 offences and shifting them to an in-house adjudication mechanism, and also omitting at least one offence.
The committee has proposed the concept of small LLP as well as provision for LLPs to issue non-convertible debentures.
Comments can be submitted till February 2, the ministry said in a communication on Monday.
Nischal Arora, Partner at Nangia & Co LLP, said that a small LLP is one in which contribution of partners does not exceed Rs 25 lakh and turnover does not exceed Rs 40 lakh.
Such a framework will enable the small LLPs to start making small efforts into reporting and eventually become fully compliant with other laws such as tax and labour laws, Arora added.
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