The Limited Liability Partnership(Significant Beneficial Owners) Rules, 2023

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 9th November, 2023

G.S.R. 832(E). 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, namely :-
1. Short title and commencement.- (1) These rules may be called the Limited Liability Partnership(Significant Beneficial Owners) Rules, 2023.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Applicability.- The provisions of these rules shall apply to any Limited Liability Partnership.
3. Definitions.- (1) In these rules, unless the context otherwise requires,-
[ II 3(i)] 23(a)
(b)
(c)
management or policy decisions exercisable by a person or persons acting individually or in concert,
directly or indirectly, including by virtue of their contribution or management rights or limited liabilitypartnership agreements or other agreements or in any other manner;
(d)
(e) –
(f) –
(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 of the voting rights in the body corporate; or
(iv) having the right to receive or participate in more than one-half of the distributable dividend or
distributable profits or any other distribution by the body corporate including a partnership entity as thecase may be;
(g) ted the 11th February, 2022;
(h)
1932) or a limited liability partnership registered under the Act;
(i) d liability partnership required to comply withthe 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 thenotification;
(k) “significant beneficial owner” in relation to a reporting limited liability partnership, means anindividual who acting alone or together or through one or more persons or trust, possesses one or moreof 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 per cent of thecontribution;
(ii) holds indirectly or together with any direct holdings, not less than ten percent of voting rights inrespect 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 anydirect holdings;
(iv) has right to exercise or actually exercises, significant influence or control, in any manner other
than through direct-holdings alone:
Explanation I.- For the purpose of this clause, if an individual does not hold any right or entitlement
indirectly under sub-clauses (i), (ii), (iii) or (iv), he shall not be considered to be a significant beneficial
owner.
Explanation II.- For the purpose of this clause, an individual shall be considered to hold a right or
entitlement directly in the reporting limited liability partnership, if he satisfies any of the following criteria,
namely:-
(i) the contribution in the reporting limited liability partnership representing such right or
entitlement are held in the name of the individual;
(ii) the individual holds or acquires a beneficial interest in the contribution of the reporting limitedliability partnership under sub-rule (2) of rule 22B of the Limited Liability Partnership Rules,
2009 and has made a declaration in this regard to the reporting limited liability partnership.
Explanation III.- For the purpose of this clause, an individual shall be considered to hold a right or
entitlement indirectly in the reporting limited liability partnership, if he satisfies any of the followingcriteria, in respect of a partner of the reporting limited liability partnership, namely: –
24 THE GAZETTE OF INDIA : EXTRAORDINARY [PARTII SEC. 3(i)]
(i) where the partner of the reporting limited liability partnership is a body corporate (whether incorporatedor registered in India or abroad) other than a limited liability partnership, and the individual,-
(a) holds majority stake in that partner; or
(b) holds majority stake in the ultimate holding company (whether incorporated or registered in India or
abroad) of that partner;
(ii) where the partner of the reporting limited liability partnership is a Hindu undivided family (throughkarta), and the individual is the karta of the Hindu undivided family;
(iii) where the partner of the reporting limited liability partnership is a partnership entity (through itself or apartner), and the individual,-
(a) is a partner; or
(b) holds majority stake in the body corporate which is a partner of the partnership entity; or
(c) holds majority stake in the ultimate holding company of the body corporate which is a partner of thepartnership entity.
(iv) where the partner of the reporting limited liability partnership is a trust (through trustee), and theindividual,-
(a) is a trustee in case of a discretionary trust or a charitable trust;
(b) is a beneficiary in case of a specific trust;
(c) is the author or settlor in case of a revocable trust.
(v) where the partner of the reporting limited liability partnership is,-
(a) a pooled investment vehicle; or
(b) an entity controlled by the pooled investment vehicle,
based in member State of the Financial Action Task Force on Money Laundering and the regulator of thesecurities market in such member State is a member of the International Organisation of SecuritiesCommissions, and the individual in relation to the pooled investment vehicle,-
(A) is a general partner; or
(B) is an investment manager; or
(C) is a chief executive officer where the investment manager of such pooled vehicle is a body corporate or apartnership entity.
Explanation IV – Where the partner of a reporting limited liability partnership is,
(i) a pooled investment vehicle; or
(ii) an entity controlled by the pooled investment vehicle,
based in a jurisdiction which does not fulfil the requirements referred to in clause (v) of Explanation III, theprovisions of clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation III, as the case may be, shall
apply.
Explanation V.- For the purpose of this clause, if any individual, or individuals acting through any person or
trust, act with a common intent or purpose of exercising any rights or entitlements, or exercising control or
significant influence, over a reporting limited liability partnership, pursuant to an agreement or
understanding, formal or informal, such individual, or individuals, acting through any person or trust, as the(l) “significant influence” means the power to participate, directly or indirectly, in the financial and operatingpolicy decisions of the reporting limited liability partnership but is not control or joint control of thosepolicies.
(m) (46) of section 2 of the CompaniesAct, 2013, which is not a subsidiary of any other body corporate.
(2). The words and expressions used in these rules but not defined shall have the meaning respectivelyassigned to them in the Limited Liability Partnership Act, 2008 (6 of 2009).
4. Duty of the reporting limited liability partnership.- (1) Every reporting limited liability partnershipshall take necessary steps to find out if there is any individual who is a significant beneficial owner, in relation to that
[ II 3(i)] 25reporting limited liability partnership, and if so, identify him and cause such individual to make a declaration in FormNo. LLP BEN-1.
(2) Without prejudice to sub-rule (1), every reporting limited liability partnership shall in all cases where itspartner (other than an individual), holds not less than ten per cent. of its-
(a) contribution; or
(b) voting rights; or
(c) right to receive or participate in the distributable profits or any other distribution payable in a financial
year,-give notice to such partner in Form No. LLP BEN-4, seeking information in accordance with sub-section (5)
of section 90 of the Companies Act, 2013 as applied to the limited liability partnership as per the notification.
5. Declaration of significant beneficial ownership.- (1) On the commencement of these rules, everyindividual who is a significant beneficial owner in a reporting limited liability partnership, shall file a declaration inForm No. LLP BEN-1 to the reporting limited liability partnership within ninety days from such commencement.
(2) Every individual, who subsequently becomes a significant beneficial owner, or where his significant
beneficial ownership undergoes any change shall file a declaration in Form No. LLP BEN-1 to the reporting limitedliability partnership, within thirty days of acquiring such significant beneficial ownership or any change therein.
(3) Where an individual becomes a significant beneficial owner, or where his significant beneficial ownership undergoes any change, within ninety days of the commencement of these rules, it shall be deemed that suchindividual became the significant beneficial owner or any change therein happened on the date of expiry of ninetydays from such commencement, and the period of thirty days for filing will be reckoned accordingly.
6. Return of significant beneficial owners in contribution.- Upon receipt of declaration under rule 5, thereporting limited liability partnership shall file a return in Form No. LLP BEN-2 with the Registrar in respect of suchdeclaration, within a period of thirty days from the date of receipt of such declaration by it, along with the fees asprescribed in the Limited Liability Partnership Rules, 2009.
7. Register of significant beneficial owners.- (1) The limited liability partnership shall maintain a register of
significant beneficial owners in Form No. LLP BEN-3.
(2) The register shall be open for inspection during business hours, at such reasonable time of not less thantwo hours, on every working day as may be decided by limited liability partnership agreement, or by partners of thelimited liability partnership on payment of such fee as may be specified by the limited liability partnership but not exceeding fifty rupees for each inspection.
8. Notice seeking information about significant beneficial owners.- A limited liability partnership shall
give notice in Form No. LLP BEN-4 seeking information in accordance with sub-section (5) of section 90 as appliedto the limited liability partnership by the notification.
9. Application to the Tribunal.- The reporting limited liability partnership shall apply to the Tribunal,
(i) where any person fails to give the information required by the notice in Form No. LLP BEN-4, within thetime specified therein; or
(ii) where the information given is not satisfactory, under sub-section (7) of section 90 of Companies Act,
2013
for order directing that the contribution in question be subject to such restrictions as Tribunal deems fit,
including-
(a) restrictions on the transfer of interest attached to the contribution in question;
(b) suspension of the right to receive profits or any other distribution in relation to the contribution inquestion;
(c) suspension of voting rights in relation to the contribution in question;
(d) any other restriction on all or any of the rights attached with the contribution in question.
10. Non-applicability.- These rules shall not apply to the extent the contribution of the reporting limitedliability partnership is held by.-
(a) the Central Government, State Government or any local authority;
(b) (i) a reporting limited liability partnership, or
26 THE GAZETTE OF INDIA : EXTRAORDINARY [PARTII SEC. 3(i)]
(ii) a body corporate, or
(iii) an entity,
controlled by the Central Government or by one or more State Government, or partly by the Central
Government and partly by one or more State Government;
(c) an investment vehicles registered with, and regulated by the Securities and Exchange Board of India, such asmutual funds, alternative investment funds (AIF), Real Estate Investment Trusts (REITs), InfrastructureInvestment Trust (lnVITs).
(d) an investment vehicles regulated by the Reserve Bank of India, or the Insurance Regulatory andDevelopment Authority of India, or the Pension Fund Regulatory and Development Authority.

[F. No.17/30/2018-CL-V]
MANOJ PANDEY, Jt. Secy.