In a bid to make entry into the world of business simpler and encourage the start-up ecosystem, the Rajya Sabha on Wednesday passed the Limited Liability Partnership (Amendment) Bill amid uproar by the opposition in connection to the Pegasus snooping row and other issues.
The newly passed bill, which got clearance after stirring a short debate, seeks to decriminalise 12 offences under the law and help to improve the ease of doing business by amending the Limited Liability Partnership (LLP) Act, 2008.
Finance Minister Nirmala Sitharaman moved the bill for consideration and passage. The bill was introduced in the House last week.
While some MPs, including Ram Nath Thakur, Kanakmadela Ravindra Kumar, M Thambidurai, and Sujeet Kumar, spoke on the bill, several opposition members were raising slogans against the government in the Well of the House.
The opposition has been protesting on Pegasus issue and three new farm laws, besides other matters, since the start of the monsoon session.
Amid the uproar, Sitharaman made a brief reply following which the amendment bill was passed with voice vote.
The minister said it is a very timely bill and will bring positivity in the LLP eco-system. She stressed that the legislation will lead to ease of doing business.
Some opposition members tried to raise their issues when called for speaking on the bill. However, Deputy Chairman Harivansh did not allow them.
The bill proposes to introduce the concept of “small limited liability partnership” in line with the concept of “small company” under the Companies Act, 2013.
It will also amend certain sections of the Act so as to convert offences into civil defaults and to convert the nature of punishment provided in the said sections from fines to monetary penalties.
Currently, there are 24 penal provisions and 21 are compoundable offences, while three are non-compoundable ones.
The proposed bill seeks to reduce the total number of penal provisions under the LLP Act to 22, compoundable offences to seven, non-compoundable offences to three and the number of defaults to be dealt with under the 'In-House Adjudication Mechanism' will be only 12.
Compoundable offences are those which can be settled by paying a certain amount of money.
Offences that relate to minor/ less serious compliance issues, involving predominantly objective determinations, are proposed to be shifted to the In-House Adjudication Mechanism (IAM) framework instead of being treated as criminal offences.
The bill also seeks to insert a new section 34A so as to empower the central government to prescribe “Accounting Standards” or “Auditing Standards” for a class or classes of limited liability partnerships.
Earlier, this week, the Union Cabinet had approved amendments to the Act including decriminalising 12 offences under the law.
This is the first time that changes are being made to the Act since it came into effect in 2009.
At present, there are relaxations for thresholds up to turnover size and partner's contribution of Rs 40 lakh and Rs 25 lakh, respectively.
Once the amendment is in place, the thresholds will be revised upwards.
(With PTI Inputs)