Limited Liability Partnerships (LLPs) can no longer escape from late filing of information with Registrar of Companies (ROC). As per the powers conferred upon the Central Government under Section 67 of the Limited Liability Partnership Act, 2008, Section 460 of the Companies Act, 2013 which provides for condonation of delay has now been extended to LLPs with effect from 30th January, 2020.
INTRODUCTION:
Under the amendment, the Government can impose sections of Companies Act 2013 on LLPs in the public interest. Many provisions like capping the number of partners, authorising Registrar of Companies for inspection and implementation of Accounting Standards will be applied to LLPs also.
Provision under Section 67 of The Limited Liability Partnership Act, 2008 :
Application of the provisions of the Companies Act:
(1) The Central Government may, by notification in the Official Gazette, direct that any of the provisions of the Companies Act, 1956 (1 of 1956) specified in the notification-
(a) shall apply to any limited liability partnership; or
(b) Shall apply to any limited liability partnership with such exception, modification and adaptation, as may be specified, in the notification.
(2) A copy of every notification proposed to be issued under sub-section (1) shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses.
Jurisdiction of Section 460 of Companies Act, 2013 :
Section 460 of the Companies Act, 2013 refers to condonation of delay of offences in certain cases as enshrined below:
1. Delay in filing application to the Central Government.
2. Delay in filing any document to the Registrar.
In the aforesaid cases, the Central Government can condone the delay after recording the reasons in writing accompanied by an application for condonation & Form CG -1.
Revised jurisdiction of Section 460 of Companies Act, 2013:
As per the recent notification dated 30th January 2020, Ministry of Corporate Affairs (MCA) has given a relaxation to all LLPs by extending the scope of condoning the delay to them in filing applications/documents to the Central Government/Registrar. Earlier only Companies were given this power but with effect from 30th January LLPs may also avail this power by filing Form 22 with the Registrar.
Key Takeaways:
- The said amendment would give more power to Registrar of Companies to set enquiry and inspection on the functioning of LLPs.
- Amendment under Section 460 will revive the LLPs from Compounding of offences.
It will help to lift the corporate veil of doubtful companies who convert themselves into LLPs as the same has lesser compliance as compared to companies and would mask off them.
Conclusion:
It can be concluded that with such extension of provision, LLPs may rectify and condone the offence instead of opting for compounding of offence. Therefore, LLPs will now have to strive for timely filing else the same would not only invite additional fees but also condonation of delay.
Source- https://taxguru.in/corporate-law/section-460-companies-act-2013-applicable-llp.html
Jaya Sharma-Singhania
Founder- Jaya Sharma & Associates
jaya@jsa-cs.com
Neha
Associate
Jaya Sharma & Associates
bodha@jsa-cs.com
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