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The Ministry of Corporate Affairs (MCA) issued a circular on May 3, 2021, to provide relaxation in payment of additional fees and extend the dates of filing forms by LLP and Companies without any additional fees.
The duration for such relaxation was notified for the time period from April 1, 2021, to May 31, 2021. The forms that were to be duly filed by the Companies and LLP could be filed by the date July 31, 2021, for which additional fee was exempted.
Abstract
The Ministry of Corporate Affairs initially in the year 2022 received several requests to extend the last date of filing forms to July 31, 2022. Companies and LLPs faced hurdles in filing the forms at the Portal of MCA.
Since the Pandemic COVID-19, companies and legal entities were facing several issues with the website and the official portal of MCA, considering which such relaxation was provided to the LLPs and Companies.
Therefore, MCA, considering the requests, extended the last date of filing forms from July 31, 2021, to August 31, 2021, and provided several relaxations in the compliances that are duly to be followed by the Limited Liability Partnerships (LLPs) under the LLP Act 2008 and Companies under Companies Act 2013.
The extension that the Ministry of Corporate Affairs granted provided exemption to the companies and LLPs in preparing and filing the forms with the Registrar of Companies (ROCs). The companies and LLPs received adequate time to prepare for the forms that were due from April 1 2021 till July 31 2021 and relaxation was also provided in filing them without any additional fees.
Recent Notification
MCA through General Circular No. 6/2022 which is dated May 31, 2022, provided exemption in paying additional fees in filing e-forms by LLPs in case of delay in filing.
This was applicable for all the event-based e-forms which were duly falling within the time period of February 25, 2022, to May 31, 2022, and up to June 30, 2022.
Synopsis
Ministry of Corporate Affairs received applications and representations for the timeline for filing the event-based forms by LLPs to be extended without paying any additional fees.
Additionally, it was considered in respect of the transition of version 2 of MCA-21 to version 3.
It was then decided to allow Limited Liability Partnerships to file various event-based LLP e-Forms to be filed by June 30, 2022, without paying additional fees, the dates of which were due between February 25, 2022, and May 31, 2022.
The sole purpose of this relaxation was to promote compliance on part of the Limited Liability Partnerships (LLPs).
Earlier, the Ministry of Corporate Affairs had also issued a concerning circular allowing companies to execute Extraordinary General Meetings through the mode of Video Conferencing or OAVM (Other Audio Video Means).
The shareholders were earlier provided with the exemption to be physically present and transact the information and items through e-Voting or simplified voting through their registered emails respectively. However, the duration of this circular lasted till 31st December 2021.
Applicability of Notification
This notification was made applicable to all the forms of Limited Liability Partnerships (LLPs) and was not restricted up to a Limit by the Ministry of Corporate Affairs (MCA).
Test to check if any particular form was entitled to such relaxation was checked;
- Due Date: Such Form should have been due to be filed within the duration of Feb 25, 2022, to May 31, 2022, and
- Issue Date: The date when such forms must be issued should be on or after 26th January 2022
Cases shall not fall into Circular
The above-mentioned discussion clarified the beneficiaries of the circular. However, there are cases in which no benefit of the circular could be provided.
The following mentioned forms were held ineligible to get the benefit of the mentioned circular;
- When the Due Date of filing of Form was on or before 24th February 2022,
- When the Due Date of filing of Form was on or after 1st June 2022
Who shall take Benefit from this Circular?
As a fact, Most forms of LLP should be filed within Thirty days (30 days) of the event. Considering this, for taking the benefit of this circular, even the date should have been on or after 26 January 2022.
LLP was unentitled to take benefit of this circular, if the event date was on or before 25th January 2022. However, the exemption in the case of Incorporation and Name Change. According to LLP Act, the Name is valid for 90 days.
According to the Circular, the Ministry of Corporate Affairs provided an extension and relaxation from paying additional fees to all e-forms of LLP falling from 25 Feb to 31 May 2022. Therefore, it can be concluded that if any name was approved on or after November 27, 2021, then the Fill LLP form (Form for incorporation of Limited Liability Partnership) without any difficulty could be filed till 30th June 2022.
List of Compliances
Every LLP becomes an individual legal entity after registration and further has to follow all the legal requirements that the LLP Act, 2008 and the Companies Act, 2013 prescribe.
These are the compliances that are required to be fulfilled when certain events occur and these compliances are further referred to as “Event-Based Limited Liability Partnership Compliances” or Event-based LLP compliances.
If such LLP compliances are not duly observed, LLPs shall be liable to pay a penalty.
Particulars of Partners and Consent of Designated Partner– Change in the particulars of the partners and the consent of the designated partner who seeks appointment shall be mentioned in Form 4 within 30 days from the date of such appointment of designated partners,
- Change in Registered Office of LLP- Change in the registered address of the office of LLP shall be mentioned in Form 15 within 30 days from the date of shifting of registered office,
- Change in the Name of LLP- Change in the Name of the Limited Liability Partnership shall be mentioned in Form 5 within 30 days from the date of changing the name to acknowledge ROC about such change,
- Change in LLP Agreement- Change in the Limited Liability Partnership Agreement shall be mentioned in Form 3 within 30 days from the date of such change to acknowledge ROC about such alteration,
- Change in Designated Partners– Change in the designated partners shall be mentioned in Form 4 within 30 days from the date LLP ceases an existing partner or admits a new partner,
Registration of Charges- In case any charge is created, satisfied, or modified, then it shall be mentioned in Form 8 within 30 days from the end of 6 months of the financial year.
Provision for Appointment of Designated Partner
According to Section7(3) of the LLP Act, 2008, if any person wants to become a Designated partner in a Limited Liability Partnership, then he/she will need to duly file his/her Consent in Form 4 with the Registrar of Companies (ROC) within 30 days from the date of his/her appointment.
Every LLP has also to file particulars of such designated partner in Form 4 with the Registrar of Companies within 30 days from the date of his/her appointment.
- Penalty for Non-Compliance: If any Limited Liability Partnership fails to duly file such particulars in Form 4, then all the partners of the LLP and the LLP shall be punishable with a fine of Rs. 10,000/- which may extend up to Rs. 5, 00,000/-
Change in Registered Office of LLP
If an LLP wants to change its registered office after adequate registration, then the Registrar of Companies has to be intimated about such change in the Place of the Registered Office.
This intimation will be done by filing Form 15 within 30 days from the date of shifting of the registered office. The change of registered office will be in effect from the date of filing of Form 15.
- Penalty for Non-Compliance: If any LLP and its partners fail to duly file Form 15 within 30 days from the date of shifting of registered office then all the partners of the LLP and the LLP shall be liable to be fined. Such penalty shall not be less than Rs. 2000/- and may extend up to Rs. 25000/-.
Change in Name of Limited Liability Partnership
In case any Limited Liability Partnership after registration wants to change its name, then it duly needs to file Form 5 with the Registrar of Companies (ROC) within 30 days from the date of change in name of LLP to intimate ROC about such change in the name.
- Penalty for not filing Form 5: If any LLP and its partners fail to duly file Form 5 within the prescribed duration, then the LLP and its partners shall be liable for a penalty of Rs. 50,000/-. However, this fine may extend up to Rs. 5, 00,000/-.
Additionally, a fine of Rs. 50/- will be counted as a fine until the form is filed, for each day after the first day.
Change in LLP Agreement
If any changes are made in the Limited Liability Partnership agreement, then LLP has to file form 3 with the Registrar of Companies within 30 days from the date from which such alteration was made in the agreement.
- Penalty for Non-Compliance: If the Limited Liability Partnership (LLP) and all of its designated partners fail in duly filing form 3, then such LLP and all of its designated partners shall be liable to a penalty of Rs. 2000/- which may extend up to Rs. 25000/-.
Change in Designated Partners
In case any LLP ceases an existing partner or admits a new partner, then the LLP shall duly file Form 4 to the Registrar of Companies within 30 days from the date such partner was admitted or in case of cessation of an existing one.
- Penalty for Non-Compliance: In case LLP does not comply with the requirement of filing Form 4, then the LLP and all of its designated partners shall be liable to a fine of Rs. 2000/- and which may extend up to Rs. 25000/-.
Registration of Charges (Form 8)
The LLP Act, 2008 and LLP Rules, 2009 do not provide any provision to get the charge registered. But in case any charge is created, satisfied, or modified, then it is mandatory to mention it.
The such charge would be mentioned in the Statement of Account and Solvency in FORM-8. There is a limitation period prescribed for this which is within a period of 30 days from the end of 6 months of the financial year to which Statement of Accounts and Solvency relates.
Conclusion
The Ministry of Corporate Affairs (MCA) by Circular No. 6/2022 dated May 31, 2022, had provided relaxation to the Companies and LLP in the filing of Forms and exemptions from paying additional fees in case of delay in filing. This included all the event-based e-forms that are duly filed by LLPs.
