LLP Alert: Applicability of SBO rules for LLPs in India

The Ministry of Corporate Affairs (MCA) vide its notification dated 09/11/2023 has introduced The Limited Liability Partnership (Significant Beneficial Owner) Rules, 2023 which shall be applicable to every LLP from 10^th November 2023.

Major crux of the rules is simplified herein below and accordingly, every LLP shall comply with the following requirements:

Duty of Reporting LLP:

1. Every reporting LLP should take necessary steps to find out if there is any individual who is their significant beneficial owner, identity him and cause such individual to make a declaration in Form No. LLP BEN- I.

2. Upon receipt of BEN 1, the reporting LLP shall file a return in Form No. LLP BEN- 2 with the Registrar in respect of such declaration, within a period of (30) thirty days from the date of receipt of such declaration.

3. Every LLP should maintain a register of significant beneficial owners in Form No. LLP BEN 3.

4. The register should be open for inspection during business hours, at such reasonable time of not less than two hours, on every working day as decided by LLP agreement, or by partners of the LLP on payment of fee.

5. Apart from the above, Reporting LPP suo motto should give Notice in Form No. LLP BEN- 4, to all partners (other than an individual), who holds 10% or more of its- (a) contribution; or (b) voting rights; or (c) right to receive or participate in the distributable profits or any other distribution payable in a financial year – for seeking information.

Declaration of significant beneficial ownership: 

1. Every individual who is a significant beneficial owner in a reporting LLP, shall file a declaration in Form No. LLP BEN- I to the reporting LLP within (90) ninety days from such commencement (within 8^th February 2024).

2. Every individual, who subsequently becomes SBO or where his Significant beneficial ownership undergoes any change shall file a declaration in Form No. LLP BEN-I to the reporting LLP, within (30) thirty days of such acquisition or change.

Reporting LLP means a Limited Liability Partnership which is required to comply with the requirements of Section 90 of the Companies Act, 2013 as modified by the notification.

 LLP-SBO-Rules-2023-9 Nov 2023

Weblink of MCA Update: https://www.mca.gov.in/bin/dms/getdocument?mds=pJZaasqhxL5W9F46Ukp5lw%253D%253D&type=open