The Limited Liability Partnership (Amendment) Bill, 2021


Introduced by

Ms Nirmala Sitharaman

Minister of Finance


The bill aims to facilitate the ease of doing business and  encourage startups ecosystems across the country by decriminalizing certain offences, creation of special courts, formation of small LLPs (limited liability partnership).


Salient Points ()

Ease of Business

The bill facilitate the ease of doing business and encourage startups. 

Decriminalization of certain offences

The Bill converts 12 offences into civil defaults and converts the nature of punishments from fines (monetary and jail term) to  penalties (monetary).

Introduction of small LLPs

It proposes to create small LLPs to encourage entrepreneurs. And would have fewer compliances and fees.


Formation of Small LLPs

The bills provides for small LLPs:

  • Contribution of partners is upto Rs 25 lakh (can be increased to Rs 5 crore)
  • Turnover is upto Rs 40 lakh (can go upto Rs 50 crore)

Special Courts

The bill allows central government to establish special courts for speedy trails.

Inhouse Mechanism

The bill proposes to have In house mechanism for offences related to less/minor issues instead of being treated as criminal offence. 

Adjudicating officers

The bill proposes to appoint as many Adjudicating officers above the rank of Registrar under LLP act.


The Limited Liability Partnership Act, 2008 was enacted and notified in 2009.

This partnership became popular type of business entity as it had many advantages like more flexibility in terms of working, cost effective, less compliance issues etc.

Even the government have been encouraging and supportive by proactively working towards making policies for ease of doing  business in the country, since 2014.

After decriminalizing certain offences under Company’s Act, the ministry initiated to ease law in LLPs as well. 


Key Stats ()

# of registered LLPs in India

1 Lakh


30 Jul 2021
04 Aug 2021
09 Aug 2021

WHY (as per the govt)

Salient Points ()

It would be useful for small and medium enterprises

It would ease the process of doing business for aspiring entrepreneurs.

It would help in rewarding law abiding businesses

This would discourage wrong practices



Videos ()


In Limited Liability Partnership, all partners have limited liability. And one partner is not responsible for other partners action, misconduct and negligence.

Traditional Partnership (TP) Firms vs Limited Liability Partnership (LLP) Firms

ParticularsTraditional Partnership Firms (TP)Limited Liability Partnership (LLP)
LiabilityLiability is unlimited and partners are liable for any actions taken by any partnersLiability is limited to the amount of capital invested
Legal BackingThis is governed by Indian Partnership Act, 1932.This is governed by Limited Liability Partnership Act, 2008
Perpetual SuccessionThere is no succession in traditional partnership.It can have perpetual succession
Minors as partnersMinors can be admitted to take benefit Minors cannot be admitted to the benefits
EntityThere is no such thing as separate legal entityHas separate legal entity and is liable to the full extent of its assets (partners liability is limited)


Citizen Poll

The Limited Liability Partnership (Amendment) Bill, 2021


Do you think the government has actually made the LLPs policies business-friendly or just superficial amendments?

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The Limited Liability Partnership (Amendment) Bill, 2021

Do you think the government has actually made the LLPs policies business-friendly or just superficial amendments?


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