News Summary

MCA Updates
Analysis of the recent amendments – LLPs

Many significant changes have been made to the LLP Act, 2008 and LLP Rules along with a few sections of Companies Act, 2013 made applicable to LLPs.

CS Rajeswari J Pai and Ms. Krithika Murali M have summarised the amendments made relating to LLPs vide provisions of the LLP (Amendment) Act, 2021, LLP (Amendment) Rules, 2022 and applicability of certain sections of Companies Act, 2013 (CA, 2013) to LLPs in an article titled “Analysis of the recent amendments – LLPs”.

6 minutes is all it takes to read the entire article!

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LLP Amendment Act, 2021 – notified

Vide notification dated 11.02.2022, sections 1 to 29 of the Limited Liability Partnership (Amendment) Act, 2021 have been notified to take effect from 01.04.2022.

Open Notification No S.O. 621(E) dtd 11.02.2022
LLP (Amendment) Rules, 2022

MCA notifies the Limited Liability Partnership (Amendment) Rules, 2022 (“the Rules”) which shall come into force on 01.04.2022. Highlights of the Rules are as follows:

  • A Company or proprietor owning a registered Trademark which too nearly resembles the name of an existing LLP or new LLP incorporated subsequently, may apply to the Regional Director in Form No. 23 to give direction to the LLP to change its name.
  • If the LLP fails to change its name within a period of 3 months from the issue of the order the letters “ORNDC” i.e. Order of Regional Director (RD) Not Complied will be added below the name of the LLP and will have to be used in all official communications and publications.
  • Reduced filing fee for Small LLPs have been detailed.
Open Amendment Rules
Certain sections of CA2013 made applicable to LLPs

MCA has notified that following sections of CA, 2013 shall become applicable to LLPs with effect from 11.02.2022:

Section – CA, 2013 Particulars
90(1) to 90(11) Register of significant beneficial owners in a company
164(1) & (2) Disqualifications for Appointment of Director
165(1), (3) to (6) Number of Directorships
167(1) to 167(3) Vacation of office of Director
206(5) Power to Call for Information, Inspect Books and Conduct Inquiries
207(3) Conduct of Inspection and Inquiry
252(1) to 252(3) Appeal to Tribunal
439(1) to 439(4) Offences to be non-cognizable

The applicability of sec 164(2) which disqualifies directors who have not complied with annual filings for a period of 3 years and sec 90 requiring LLPs to disclose beneficial ownership, are noteworthy amendments.

The intention to extend applicability of sections of CA, 2013 seems to be to increase compliance mechanisms and to better regulate LLPs and Designated Partners.

Open Notification G.S.R. 110(E) dtd 11.02.2022
Report on Corporate Social Responsibility in Form CSR-2

Vide notification dated 11.02.2022, MCA has notified the Companies (Accounts) Amendment Rules, 2022 (“Amendment Rules”), which has amended the Companies (Accounts) Rules, 2014. Vide the Amendment Rules, Form CSR-2 for filing Report on Corporate Social Responsibility has been introduced.

The Form should be filed as an addendum to the Form AOC-4 / AOC-4 XBRL / AOC-4 (NBFC) (Ind AS) (filing of Financial Statements) for FYs 2020-21 onwards. It is also clarified that for the FY 2020-21, Form CSR-2 is to be filed separately on or before 31st March, 2022 after filing of the financial statements with the Registrar of Companies.

In a bid to collect data from all CSR implementing Corporates, the Government has almost converted the entire CSR Rules introduced in January, 2021 into Form CSR-2, requiring humongous data at a granular level to be furnished by corporates. CSR calls for full time resources not only to meet the obligation but also to maintain and keep furnishing data and records.

Open Notification No. G.S.R. 107(E) dtd. 11.02.2022
Relaxation on levy of additional fee for annual filing

MCA vide Circular dated 14.02.2022 has relaxed the levy of additional fee for filing of Form AOC-4/AOC-4 XBRL / AOC-4 (CFS) (filing of financial statements) till 15.03.2022 and for Form MGT-7 / MGT-7A (Annual Return) till 31.03.2022, respectively.

Open Circular No, 01/2022 dtd. 14.02.2022
MSME Update
Extended time for Udyam Registration

The Ministry of MSMEs vide Notification dated 16.06.2021 notified that all existing Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar Memorandum (UAMs) registrations obtained till 30.06.2020 shall remain valid till 31.12.2021.

A further extension has been granted till 31.03.2022.

Open Notification No. S.O. 278(E) dtd. 19.01.2022

Union Budget – 2022
Highlights of Union Budget 2022

Our Associate R. Krishnamurthy, Chartered Accountant has summarised the highlights of Income Tax and GST updates of the Union Budget 2022 in the attached article titled “Highlights of Union Budget 2022”.

Read the article to familiarise yourself with GST and Income Tax changes from Union Budget 2022 in less than 13 minutes!

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IBBI Updates
IBBI (IRP for Corporate Persons) (Amendment) Regulations, 2022

IBBI has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2022 vide notification dated 09.02.2022. The amendments made are as follows:

  • Regulation 18 – Meeting of Committee of Creditors:
  • Sub-regulation 3 added – Resolution Professional may place a proposal received from members of the committee in a meeting, if he considers it necessary and shall place the proposal if the same is made by members of the committee representing at least 33% of the voting rights.

  • Regulation 39A – Preservation of records
  • The Regulation has been substituted to include a list of documents that need to be preserved. The Resolution Professional or Interim Resolution Professional shall preserve copies of all such records which are required to give a complete account of the Corporate Insolvency Resolution Process (“CIRP”).

    Electronic records of documents are to be preserved for a minimum period 8 years and physical copies for a minimum of 3 years from the date of completion of CIRP or conclusion of any proceedings relating to CIRP before NCLT, NCLAT or court, whichever is later.

Open Notification No. No. IBBI/2021-22/GN/REG/080 dtd 09.02.2022

Consumer Protection Rules
Overview of Direct Selling Business and Recent Regulatory changes

In the 271st issue of Samhita, we had highlighted about the recognition given to Company Secretaries under the Direct Selling Entities segment vide the Consumer Protection (Direct Selling) Rules, 2021.

Click below to read the article by CS Rajeswari J Pai titled “Overview of Direct Selling Business and Recent Regulatory changes” explaining details regarding the direct selling entities model of business which has evolved over the years.

10 minutes is all it takes to read the entire article!

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