MCA notifies Limited Liability Partnership (Significant Beneficial Owners) Rules 2023

The Ministry of Corporate Affairs (MCA) has notified Limited Liability Partnership (Significant Beneficial Owners) Rules 2023 via issuing a Notification.

The Notification stated as follows:

In exercise of the powers conferred by section 79 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government hereby makes the following rules.

These rules may be called the Limited Liability Partnership (Significant Beneficial Owners) Rules, 2023. They shall come into force on the date of their publication in the Official Gazette.

The provisions of these rules shall apply to any Limited Liability Partnership.

(I) In these rules, unless the context otherwise requires,-

(a) “Act” means the Limited Liability Partnership Act. 2008 (6 of 2009);

(b) “Annexure” means the Annexure to these rules;

(c) “control” shall include the right to appoint majority of the designated partners or to control the management or policy decision exercisable by a person on or persons acting individually or in concert, directly or indirectly, including by virtue of their contribution or management right or limited liability partnership agreements or other agreements or in any other manner;

(d) “fees” means the fees as specified in the Limited Liability Partnership Rules. 2009;

(e) “Form” or ‘e-form” means a form set forth in the Annexure to these rules;

(f) “majority stake” means;-

(i) holding more than one-half of the equity share capital in the body corporate; or

(ii) holding more than one-half of the contribution in a partnership entity; or

(iii) holding more than one-half ofthe voting rights in the body corporate; or

(iv) having the right to receive or participate in more than one-ha If of the distributable dividend or distributable profits or any other distribution by the body corporate including a partnership entity as the case may be;

(g) “notification” means the n0tification number G.S.R. 110 (E), dated the 11th February, 2022;

(h) “partnership entity” means a partnership firm registered under the Indian Partnership Act, 1932 (9 of 1932) or a limited liability partnership registered under the Act;

(i) “reporting limited liability partnership” means a limited liability partnership required to comply with the requirements of section 90 of the Companies Act, 2013 as modified by the notification;

(j) “section” means a section of Act and includes a section of the Companies Act, 2013, as modified by the notification;

(k) “significant beneficial owner” in relation to a reporting limited liability partnership, means an individual who acting alone or together or through one or more persons or trust, possesses one or more of the following rights or entitlements in such reporting limited liability partnership, namely:-

(i) holds indirectly or together with any direct holdings, not less than ten percent of the contribution;

(ii) holds indirectly or together with any direct holdings, not less than ten percent of voting rights in respect of the management or policy decisions in such limited liability partnership;

(iii) has right to receive or participate in not less than ten 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;

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