New Beneficial Ownership Reporting Requirements for Indian LLPs Come into Effect

Enhanced Transparency and Regulatory Compliance in India

MUMBAI, INDIA - October 27th, 2023 marked a significant milestone as the Ministry of Corporate Affairs (MCA) implemented new beneficial ownership reporting requirements for all Limited Liability Partnerships (LLPs) in India. This move aims to enhance transparency and regulatory compliance.

Key Changes to LLP Rules

The revised rules follow amendments to the Limited Liability Partnership Rules, 2009 and Section 89 of the Companies Act, 2013. The key changes include:

• Maintaining a Register of Partners: All LLPs with identifiable beneficial owners must maintain a register that includes information about partners and their respective interests.
• Filing a Declaration of Beneficial Interest: A declaration must be submitted through a nominee or registered holder-beneficial owner relationship, detailing the beneficial interest held by each partner.

Timelines for Updates

The Register of Partners must be updated promptly in the event of any changes. Modifications to the register must be made within seven days of such alterations.

Objectives Behind the New Requirements

These new requirements aim to provide greater clarity on ownership structures and help prevent illicit financial activities by ensuring that all stakeholders are aware of the beneficial owners behind an LLP.

Implications for Indian Businesses

With these measures now in place, Indian businesses must adapt to the new regulatory landscape to maintain compliance and avoid potential penalties.