CENTRE TO CUT 50% FINES FOR STARTUPS CREATED AS LLPS

NEW DELHI: The government is set to announce a 50% cut in penalties for nearly a dozen offences by startups incorporated as limited liability partnerships (LLPs), an official aware of the development said.

The offences include noncompliance relating to requirements of filing statutory documents and returns, appointing a designated partner responsible for all compliances and having at least one resident partner for the LLP, the official cited above said on condition of anonymity.

The ministry of corporate affairs will notify the requirements for startup LLPs to avail of this relief. One of them is that the startup needs to be recognized as one by the department for promotion and internal trade (DPIIT), the person mentioned above said.

“This relief is expected to encourage small unincorporated businesses to adopt LLP form and become part of the formal economy,” the official said.

An email sent to the secretary in the ministry and to the spokesperson remained unanswered till the time of going to press. The reduced penalty is available to the entity and the partners, including the designated partner and other persons liable to pay the penalty.

The other offences for which the reduced penalty would apply include lapses in reporting changes in partners of an LLP, filling the vacancy of a designated partner in time, maintaining a registered office, informing the authorities about address changes, and disclosing details about the firm in its official communications.