LLP Update – Limited Liability Partnership (Amendment) Rules, 2017

LLP Update – Limited Liability Partnership (Amendment) Rules, 2017
 The  Ministry of Corporate Affairs (MCA) has issued the Limited Liability Partnership (Amendment) Rules, 2017 (Amendment Rules)  to further amend the Limited Liability Partnership Rules, 2009 (Principal Rules) on 16 May 2017 and it is effective from 20 May 2017.

As per Rule 37(1)(b) of the Principal Rules, a Limited Liability Partnership (LLP) has an option to apply for striking off its name from the Register if it is not carrying on any business or operation for a period of one year or more by making an application in Form 24. In this regard, MCA has issued the Amendment Rules inserting Rule 37(1A) followed by Rule 37(1).

The following are the key highlights of the Amendment Rules:-

  • As per the Amendment Rules, an LLP which is not carrying on any business or operation for a period of one year or more shall file overdue returns in Form 8 (Form for filing Statement of Account & Solvency) and Form 11 (Form for filing Annual Return) up to the end of the financial year in which the LLP ceased to carry on its business or commercial operations before filing Form 24;
  • Further, such Form 24 shall be filed enclosing a statement of account disclosing nil assets and nil liabilities, an affidavit by designated partners, copy of acknowledgement of the latest Income Tax return and such other enclosures as specified in the Amendment Rules;
  • Amendment Rules have clarified that the date of cessation of commercial operation will be the date from which the LLP ceased to carry on its revenue generating business and transactions such as receipt of money from debtors or payment of money to creditors, subsequent to such cessation will not form part of revenue generating business
  • An important point to note in this amendment is that an LLP cannot apply for strike off its name unless it has completed the filing of its previous year’s annual filing documents and Income Tax returns.

Full text of Rule:
http://www.mca.gov.in/Ministry/pdf/LimitedLiabilityPartnershipAmendmentRules2017_22052017.pdf

About The Author

Adarsh Madrecha

CA, ISA, BCAF

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