With effect from April 1, the ministry of corporate affairs has decriminalised procedural errors and technical defaults by limited liability partnerships (LLPs). The LLP (Amendment) Act of 2021 decreased the number of penal provisions from 24 to 22 and decriminalised 12 others. The errors that were decriminalised were of a technical or procedural nature, and there will be no need to bring them before company law courts for adjudication because no criminal intent is claimed.
In the service business and among start-ups, the limited liability partnership (LLP) is the favoured legal structure. There are about 200,000 limited liability partnerships (LLPs) in India. Separately, under the Act, the ministry designated registrars of companies (RoCs) as adjudicating authorities. This will also take effect on April 1st. Appeals will be handled by the Regional Directors in charge of their respective regions.
The Regional Director was given the authority under the Act to combine offences that were only punishable by a fine. It also gave the Centre the authority to set accounting and auditing rules for specific types of LLPs. It also empowered the Centre to establish special courts to deal with violations of the law immediately.