LLP (Second Amendment) Rules 2022 – Key Takeaways

The Ministry of Corporate Affairs (MCA) vide its notification dated March 04, 2022, has notified the Limited Liability Partnership (Second Amendment) Rules, 2022 to amend the existing Limited Liability Partnership Rules, 2009. The amended rules would come into force on the date of its publication in the Official Gazette. Key amendments include a) Increase in allotment of number of DPINs to 5 in FiLLiP form, b) Allotment of PAN & TAN along with Certificate of Incorporation, c) Introduction of web-based procedure for LLP incorporation in line with SPICE+. d) Inclusion of disclosures w.r.t. Contingent Liability in Form 8, e) Shifting of all e-forms into web-based form f) Inclusion of provision w.r.t. signing of statements of accounts and solvency and Annual Return of LLPs under insolvency. Let us discuss each amendment in detail.

1. Increase in allotment of number of DPINs at the time of incorporation

The amendment has been made w.r.t allotment of Designated Partner Identification Number (DPIN) at the time of incorporation. Now Five DPINs can be applied at the time of incorporation. Earlier, application for a maximum of two DPINs was allowed at the time of incorporation of LLP. This is a great step towards easing the procedure of appointing more than two Designated Partners (not having DPIN/ DIN) subject to a maximum of five Designated Partners at the time of incorporation itself.

2. Allotment of PAN & TAN along with Certificate of Incorporation

The amended provisions provide that now PAN and TAN would be allotted to LLPs along with the Certification of Incorporation (COI) itself. The amendment has been made to align the Incorporation process of LLPs as that of the Company. Earlier there was no provision for the automatic allotment of the PAN & TAN of LLP at the time of incorporation itself.

LLPs were required to apply for PAN and TAN separately and were not included in the process of incorporation like in the case of Companies wherein PAN and TAN application is a part of SPICE+.

3. Relaxation in requirement of mentioning the name of authority under which name change application is filed

Earlier whenever an application for the name change of LLP is to be made Rule 19 (4) of the LLP Rules, 2009 required the person making the application to attach-

(a) the authority under which he is making such an application;

(b) 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.

Through the amendment notification the requirement of attaching the authority under which such person is making an application under Rule 19 of the LLP Rules, 2009 is taken away. This will reduce the compliance burden of the LLPs.

4. Signing of Statement of Accounts & Insolvency of LLPs under Insolvency

The amended provisions prescribe that Statement of Account and Solvency may be signed on behalf of the LLP by an Interim Resolution Professional or Resolution Professional, or Liquidator or LLP Administrator in case where the Corporate Insolvency Resolution Process (CIRP) has been initiated against the LLP under the IBC, 2016 or the LLP Act, 2008.

Prior to the amendment, Rule 24 (6) of the LLP Rules, 2009 prescribed that the Statement of Account and Solvency of the LLP to be signed by its designated partners. There were no provisions with regard to the signing of the Statement of Account and Solvency of the LLPs under insolvency.

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