Recently, Ministry of Corporate Affairs (“MCA”) has introduced a couple of amendments in the Limited Liability Partnership Rules, 2009 (“LLP Rules”) on October 27, 2023. These amendments are aligned with the requirements under the Companies Act, 2013 (“CA, 2013”). An LLP is now required to maintain register of partners, provide declaration of beneficial interest in contribution of LLP and assign a designated person for providing information on beneficial interest.
As under CA, 2013 a company is required to maintain register of members comprising of the details such as name, folio number, number of shares held by the member of the company. Similarly, now every LLP is required to maintain a register  of partners in Form 4A (“Register”). The Register should contain the details:  (a) name, address, status, occupation of the partner; (b) date of becoming partner; (c) amount of contribution 1 and its nature; (d) beneficial ownership; (e) nominee details; and (f) cessation from LLP. The Register is to be maintained since the incorporation of the LLP and is to be kept at the registered office of the LLP.
In case of any change, the entries in the Register are required to be made within 7 days of such change. The entries would also need to be authenticated. Currently, the LLP Rules do not specify the person who would be authenticating the entries in the Register, ideally, they should be authenticated by a Designated Partner.
The existing LLPs are required to maintain the Register within 30 days from the amendment. Further, under CA, 2013 every registered member and beneficial member is required to declare the beneficial interest in shares to the company which then intimates the same to the Registrar. Uniformly, now an LLP is required to provide a declaration to the Registrar in case the beneficial interest in contribution is
not held by the partner whose name is entered in the Register (“Registered Partner”).
A Registered Partner is required to declare to the LLP that he does not hold any beneficial interest in the contribution along with the details of the person who holds beneficial interest but whose name is not entered in the Register (“Beneficial Partner”). The declaration is to be made by the Registered Partner in Form 4B within 30 days of his name of being entered in the Register. The form is to be submitted along with the proof of identity of Registered Partner and Beneficial Partner and instrument under which the beneficial interest was created. In the event of any change in the beneficial interest, the Registered Partner is required to provide the declaration to the LLP within 30 days of such change.
The Beneficial Partner is also required to provide a declaration to the LLP in Form 4C within 30 days of acquiring beneficial interest disclosing the nature of his interest and the particulars of Registered Partner. The proof of identity of Beneficial Partner and Registered Partner and instrument under which the beneficial interest was created is required to be enclosed with the declaration. Likewise, pursuant to any change in the beneficial interest, the Beneficial Partner is required to disclose the same within 30 days to the LLP.
Once Form 4B and 4C are received from the Registered Partner and the Beneficial Partner, respectively, the LLP is required to record the declarations in the Register and then file them with the Registrar in Form 4D within 30 days of receipt.
Additionally, every LLP is required to designate a person who would be responsible for furnishing, and extending co-operation in providing information to the Registrar or any other authorized officer with respect to beneficial interest in contribution of the LLP.
The increase in number of LLPs being incorporated in the last few years has given rise to the need to have greater transparency. Accordingly, MCA has introduced the aforementioned amendments. These amendments will also help to ensure a stronger regulatory framework to tackle the money-laundering issue and identification of benami transactions in LLP.