Scheme of Condonation of Delay for Limited Liability Partnership (LLP)

author Sakshi Bhatt

calender August 24, 2023

Scheme of Condonation of Delay for Limited Liability Partnership (LLP)

The Ministry of Corporate Affairs (MCA) vide its circular no. 08/2023 dated August 23, 2023, introduced a condonation scheme for delays in filing Form-3, Form-4, and Form-11 under Section 67 of the LLP Act, 2008 read with Section 460 of the Companies Act, 2013. The Government has received representations that certain Limited Liability Partnerships (LLPs) were finding difficulties in filing Form 3 (LLP Agreement and alterations), Form 4 (Information regarding appointment, resignation, change in details of a partner), and Form-11 (Annual Return). In response to the challenges reported by certain LLPs in the completion of Form-3, Form-4, and Form-11 submissions due to various factors, including discrepancies within the electronic registry of the Ministry, a significant initiative has been undertaken by the Government. This proactive step aligns with the Government's steadfast commitment to fostering an environment conducive to seamless business operations. Under the authority vested by section 67 of the Limited Liability Partnership Act, 2008, the Ministry has undertaken a strategic approach to alleviate the concerns faced by these LLPs. The Ministry's decision to grant a one-time relaxation in additional fees to those LLPs unable to meet the prescribed deadlines for filing Form-3, Form-4, and Form-11 is both pragmatic and forward-looking. This exemption provides a valuable opportunity for these entities to rectify their filings and update their essential information in the master data, thereby facilitating smoother compliance with future obligations. The key aspects of this initiative underscore the Ministry's dedication to ensuring effective solutions:

  • Streamlined processing: Notably, Form-3 and Form-4 will be processed utilizing the Straight Through Process (STP) mechanism, streamlining the filing procedure for various purposes, except for cases involving changes in business activities. Stakeholders are encouraged to adopt a sequential approach to filing i.e., prioritizing older event dates, thus ensuring accurate updates to the master data.

  • Edition in auto-populated data: During the submission process, the pre-filled data from the existing master data of the LLP will be auto-populated in these forms, with provisions for edits. This emphasizes the responsibility of stakeholders to ensure data accuracy. Misrepresentation carries consequences for both the Designated Partner and the certifying professional, as outlined by legal provisions.

  • Relief from additional fees in filing Form 3 and Form 4: The decision to exempt additional fees for filing Form 3 and Form 4, commencing from January 1, 2021, and beyond, is a significant relief. For events preceding January 1, 2021, the opportunity to file is extended with an additional fee structure i.e., two times or four times of normal filing fees, aimed at accommodating small LLPs and other than small LLPs respectively.

  • Relief from additional fees in filing Form-11: Similarly, the exemption from additional fees for filing Form-11 for the financial year 2021-22 onwards is in line with the Ministry's mission to facilitate compliance. For events preceding the said financial year, Form 11 can be filed two (02) times and four times the (04) normal filing fee as an additional fee for small LLPs and Other than small LLPs respectively.

The stipulated filing window, open from September 1, 2023, to November 30, 2023, is designed to provide ample time for LLPs to avail themselves of this beneficial scheme. Crucially, the decision ensures that LLPs participating in this program will be safeguarded against any repercussions stemming from delayed submission of Form-3, Form-4, and Form-11. This comprehensive initiative exemplifies the Government's commitment to adaptively supporting businesses, fostering a culture of compliance, and ultimately nurturing an environment of sustained growth and ease of doing business.

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