Team Blitz India
NEW DELHI: The Corporate Affairs Ministry has notified the Limited Liability Partnership Rules, 2023, that require a Limited Liability Partnership Firm (LLP) to report about its Significant Beneficial Owners to the Registrar of Companies within 30 days of the date of the declaration made by an individual about holding or acquiring that status.
The rules, which include a definition and timeline for reporting, became effective on November 10.
The latest move signifies the intent to ascertain the true or “beneficial” owner’s interest in and control over the contributions made by the partners and individuals to the LLP.
As per the new set of rules, a “Significant Beneficial Owner” in an LLP means an individual who is acting alone or together or through one or more persons or trust, possesses one or more of four rights or entitlements namely (i) holds indirectly or together with any direct holdings, not less than 10 per cent of the contribution; (ii) holds indirectly or together with any direct holdings, not less than 10 per cent of voting rights in respect of the management or policy decisions; (iii) has right to receive or participate in not less than 10 per cent of the total distributable profits, or any other distribution, in a financial year through indirect holdings alone or together with any direct holdings and (iv) has the right to exercise or actually exercises, significant influence or control, in any manner other than through direct-holdings alone.
Going further, every reporting LLP will need to identify any individual who is a significant beneficial owner in its structure. Such an individual is required to give a declaration to the reporting LLP within 90 days from commencement of new rules.