The Ministry of Corporate Affairs (MCA) has, through General Circular No. 08/2023 dated August 23, 2023, spotlighted a crucial concern regarding filing lapses in specific LLP forms. Let’s delve deeper into the context, challenges, the Government’s supportive response, and the implications of this directive.
Contextual Background
LLPs or Limited Liability Partnerships, much like corporations, have periodic regulatory filings to maintain their status and ensure compliance. However, numerous LLPs communicated challenges faced in aligning with the filing requirements for:
- Form-3: Pertaining to the LLP Agreement and any changes to it.
- Form-4: Relating to various partner details, including appointments, cessations, and changes.
- Form-11: The Annual Return of the LLP.
A key concern cited was data mismatches within the Ministry’s electronic registry, creating hurdles in updating records timely.
Commitment to Business Ease
The Indian Government has consistently prioritized the enhancement of ease of doing business in the country. Addressing the concerns raised, the MCA has introduced a one-time relief mechanism. This step:
- Mitigates the financial implications due to delayed filings.
- Facilitates LLPs in updating and aligning their master data records with the Ministry’s electronic registry.
Detailed Features of MCA Circular 08/2023
1. Straight Through Process (STP):
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- Concept: The STP mode means a streamlined processing method, reducing manual interventions.
- Implication: Form-3 and Form-4 will be expedited, but changes in business activities are exempted from this mode.
- Recommendation: Stakeholders should prioritize filing based on the event dates, ensuring that older events are filed first.
2. Master Data Pre-filled Forms:
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- Concept: Forms will come pre-populated with existing master data.
- Implication: The convenience of pre-filled forms is juxtaposed with the responsibility to ensure data accuracy.
- Warning: Incorrect or misleading data can result in punitive action against both the Designated Partner and the certifying professional.
3. Fee Structures and Exemptions:
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- Dates to Note: Forms for events after January 1, 2021, benefit from fee waivers. For prior dates, additional fees will apply.
- Size Matters: The scale of the fee varies depending on the size of the LLP, with differential rates for small LLPs and others.
4. Filing Window:
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- Dates: From September 1 to November 30, 2023.
- Implication: This limited window requires LLPs to be proactive in preparing and submitting their forms.
5. Legal Protection from Penalties:
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- Concept: The circular offers protection against legal repercussions for delayed filings.
- Implication: LLPs adhering to this directive will not be subjected to actions for previous delayed submissions.
Conclusion- Through General Circular No. 08/2023, the MCA has taken a nuanced approach, balancing regulatory oversight with empathetic relief for LLPs. This initiative is a testament to the Government’s commitment to supporting businesses while ensuring compliance. It is imperative for LLPs to leverage this window effectively, rectifying past discrepancies and realigning with regulatory requirements.
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F. No. Policy-01/2/2021-CL-V-MCA-Part(3)
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
5TH Floor, ‘A’ Wing Shastri Bhawan,
Dr. R.P. Road, New Delhi
General Circular No. 08/2023 Dated: 23.8.2023
To,
DGCOA
All Regional Directors/ All Registrar of Companies
All stakeholders
Subject: Condonation of delay in filing of Form-3, Form-4 and Form-11 under section 67 of Limited Liability Partnership Act, 2008 read with section 460 of the Companies Act, 2013 – reg.
Sir(s),
Representations have been received by the Government that certain LLPS are finding difficulties in filing Form- 3 (LLP Agreement and changes therein), Form- 4 (Notice of appointment, cessation, change in name/ address/designation of a designated partner or partner and consent to become a partner/designated partner) and Form- 11 (Annual Return of LLP) for various reasons including due to mismatch in the master data in electronic registry of the Ministry. Due to this, the records/data in the electronic registry are also not being updated.
2. To address these difficulties faced by the LLPS and as part of Government’s constant efforts to promote case of doing business, the Ministry, in exercise of its power under section 67 of the Limited Liability Partnership Act, 2008, has decided to grant one-time relaxation in additional fees to those LLPs who could not file the Form-3, Form-4 and Form-11 within due date and provide an opportunity to update their filings and details in Master-data for future compliances.
3. The salient features are as follows:-
i. The Form-3 and Form-4 would be processed under Straight Through Process (STP) mode for all purposes except for change in business activities. The stakeholders are advised to file these forms in sequential manner i.e., the filing for old events date may be filed first and so on so as to update the master data in proper manner.
ii. At the time of filing these forms, the pre-filled data as per existing master data of the LLP shall be provided in each of above mentioned forms but the same shall have the facility to edit. The onus of filing correct data would be on the stakeholders. In case of mis-representation, the Designated Partner and the professional certifying the form may be liable for adverse action as per provisions of the law.
iii. The filing of Form-3 and Form-4 without additional fee shall be applicable for the event dates 01.01.2021 and onwards. For events dated prior to 01.01.2021, these forms can be filed with 02 times and 04 times of normal filing fees as additional fee for small LLPS and Other than small LLPs respectively.
iv. The filing of Form-11 without additional fee shall be applicable for the financial year 2021-22 onwards. Form-11 for previous years (prior to financial year 2021-22) can be filed with 02 times and 04 times of normal filing fee as additional fee for small LLPs and Other than small LLP’s respectively.
v. These forms shall be available for filing from 01.09.2023 onwards till 30.11.2023 (both dates inclusive).
vi. The LLPS availing the scheme shall not be liable for any action for delayed filing of the Form-3, Form-4 and Form-11.
4. This issues with the approval of the competent authority.
Yours faithfully
(Karl Marx)
Deputy Director (Policy)
Author Bio
whether this scheme is applicable for Form-8?