Limited Liability Partnership Rules

Some of the key aspects of the LLP SBO Rules are as follows:

• Meaning of SBO: An SBO, in relation to a reporting LLP, 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 LLP:
• holds indirectly or together with any direct holdings, not less than 10% of the contribution or voting rights in respect of the management or policy decisions in such LLP;
• has right to receive or participate in not less than 10% of the total distributable profits, or any other distribution, in a financial year through indirect holdings alone or together with any direct holdings;
• has the right to exercise or actually exercises, significant influence or control, in any manner other than through direct-holdings alone.

Key Disclosure & Reporting Requirement:

• LLPs to identify SBO and cause him to declare his significant beneficial ownership.
• LLPs to send notice to all existing non-individual partners holding at least 10% of its contribution or voting rights or profit rights, seeking information of SBO and wherever applicable, require them to declare it.
• Individuals becoming SBO pursuant to LLP SBO Rules, to make declaration within 90 (ninety) days of commencement of LLP SBO Rules and in respect of any future acquisition (including, any change), such significant beneficial ownership, must be declared within 30 (thirty) days of such acquisition or change.
• On receiving declarations from SBO (as above), reporting LLP to file them with the MCA within 30 (thirty) days from the date of its receipt.
• LLPs to maintain a register of SBO.

• Every LLP to maintain a register of its partners, from the date of its incorporation and be kept at its registered office.
• The requirement to maintain register of partners must be complied within 30 (thirty) days from the date of commencement of the notification and any change in entries made therein should be registered within 7 (seven) days of such change.

Declaration in respect of beneficial interest in any contribution

• Concepts of ‘Registered Partner’ and ‘Beneficial Partner’ have been introduced concerning beneficial interest in the contributions of an LLP, which are similar to the concepts of ‘Registered Owner’ and ‘Beneficial Owner’ concerning beneficial interest in the shares of a Company provided under section 89 of the Companies Act, 2013 (CA 2013).
• ‘Registered Partner’ has been defined as a person whose name is entered in the register of partners of LLP but who does not hold any beneficial interest in the contribution and ‘Beneficial Partner’ as a person who holds or acquires a beneficial interest in contribution of an LLP but whose name is not registered in the register of partners.
• Registered Partner and Beneficial Partner of an LLP are required to make declarations, within 30 (thirty) days from the date on which their name is entered into the register of partners or acquisition of the beneficial interest (as the case may be), including any subsequent changes made therein.
• On receiving declarations (as above), LLP is required to record such declaration(s) in the register of partners and file it with the Registrar of Companies (RoC) within 30 (thirty) days from the date of its receipt.
• Every LLP is required to designate a partner who would be responsible for furnishing information to the RoC or any other authorized officer w.r.t beneficial interest in contributions in LLP.
• Every LLP is required to furnish the details of such designated partner to the RoC.