The ministry, which is implementing the LLP Act, has sought comments from stakeholders on the proposed changes by July 4.
It has been decided to review the penal provisions of the Act to decriminalise compoundable offences involving minor, procedural or technical violations. Offences that may not involve any harm to public interest would also be reviewed, according to the ministry.
Generally, compoundable offences are those that can be settled by paying certain amount of money.
Non-compliance with norms regarding eligibility and appointment of designated partners, registration of changes in partners, maintenance of books of account and filing of annual return, among others, are proposed to be decriminalised.
"Criminalisation of minor violations acts as an avoidable deterrent and impinges upon the business sentiments," the ministry said.
Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, said the ministry seems to be planning for an overhaul of penal provisions applicable for filing or reporting non-compliances by the partners of limited liability partnership firms, which do not involve substantial violations or are not contrary to the larger public interest.
LLP Act has 81 sections and 4 schedules.
The ministry has already decriminalised various offences under the Companies Act, 2013.
LLP is an alternative corporate business vehicle that provides the benefits of limited liability but allows its members the flexibility of organising their internal structure as a partnership based on a mutually arrived agreement.
LLP Act, 2008, is intended to bridge the gap between a company governed by the Companies Act and a general partnership firm governed by the Partnership Act, 1932, as per the communication.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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