Parliament passess LLP Amendment Bill to boost startups

The LLP Amendment Bill has been passed by the Indian Parliament, which is good news for Indian start-ups. The fundamental goal of the LLP Amendment Bill is to encourage start-ups in several ways. Hence, this is a significant upgrade for Indian companies. Parliament approves LLP Amendment Bill to encourage start-ups is the topic for discussion today.

Parliament passes LLP Amendment Bill to boost start-ups

The LLP Amendment Bill was approved by the Lok Sabha on August 9, 2021. In addition, the LLP Amendment Bill supports the start-up ecosystem and increases the simplicity of doing business in the United States.

The measure was passed by a simple majority. Moreover, despite opposition concerns, the law was passed.

Finance Minister on LLP Amendment Bill

Minister of Finance Nirmala Sitharaman said it was an important move that would energise the LLP ecosystem.

Moreover, she emphasised that the law will make doing business much simpler for everyone. According to her, there would be a reduction in illegal crimes. Because of this, doing business would be easier.

Under the draught, a small limited liability partnership would be created in keeping with the idea of a small business under the Companies Act of 2013.

Amendments in the LLP Bill

The bill proposes that a small limited liability partnership be created in order to complement the Companies Act of 2013.

The definitions of offences will be changed from criminal defaults to civil defaults. In some parts, the punishment will shift from monetary to fines. The Act now contains 24 punitive provisions, 21 of them are compoundable, and three are not.

The proposed law includes seven compoundable offenses, three non-compoundable offenses, and 12 defaults to reduce the number of criminal provisions under LLP Act 22.

Outcomes as Parliament passes LLP Amendment Bill

Offenses that are less serious and include objective decisions are suggested to be moved to the In-House Adjudication Mechanism (IAM) framework instead of being regarded as criminal offences as a result of the proposed change.

There's also a new section 34A that would empower the central government to impose accounting standards and auditing standards on limited liability partnerships.

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