Shubhada
Corporate Law & SEBI

Discuss The Implication Of Applicability Of Section 460 Of Companies Act-On LLP

Companies Act 1956 got replaced by the new Company Act 2013 and came into force on September 12, 2013, with few changes. Section 460 of the Company act 2013 corresponds with section 637 of the Company Act 1956 as Condonation of delays in certain cases as under¹ –

Where any application required to be made to the Central Government under any provision of this Act in respect of any matter is not made within the time specified therein that Government may, for reasons to be recorded in writing, condone the delay.
Where any documents required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the Central Government may, for the reason to be recorded in writing, condone the delay.

As we are all aware that, the Company Act requires Companies to file all required documents regarding the formation of companies, annual documents, and many more to the registrar. LLP Act 2008 came into effect on March 31, 2009. It is the organization of small businesses, start-ups, and large companies as it incorporates the benefits of both Partnership firm and Company. Each partner is responsible for the compliance of the provision mention under the LLP Act 2008 and ROC shall register and control the LLPs.

Central Government applies to section 460 of the Company Act 2013 to LLP under section 67 of LLP Act 2008. Central Government published a notification in the Official Gazette on January 30, 20202 and it says that provision of section 460 of the Company Act 2013 shall apply to LLPs from the date of publication of above mention notification.This notification is having retrospective as well as prospective effects.

Contents hide

1 Appointment And Duty Of Roc

2 Time Limite For Llps To Filling Documents On Mca Portal And To Roc 2.1 Summary Of Implication Of Applicability Of Section 460 Of Company Act On Llps

2.1.1 Procedure of filing application of condonation of delay with CG in Form CG-1 along with5 –

3 Abbreviation

4 Reference

4.1 Related

Appointment And Duty Of Roc

ROC appointed under section 609 of the Company Act 1956 with the primary duty of registering companies and LLPs in the respective States and the Union Territories.

Time Limite For Llps To Filling Documents On Mca Portal And To Roc

MCA clearly mentions the limitation period to the LLPs for the application required to be made to the Central Government and required documents file with the registrar. The following chart shortly mentions the E-filling under MCA and timeline.

DOCUMENTS	FORMS	LIMITATION PERIOD
Statement of account and solvency	Form 8	Within 30 days from the end of 6 months of financial year
Annual return	Form 11	Within 60 days
LLP agreement and Changes in agreement	Form 3	Within 30 days
Notice of agreement, cessation, change in name/ address and designation of partner, consent to become partner	Form 4	Within 30 days
Change in LLP name (u/s 19 read with Rule 20/2)	Form 5	Within 30 days
Change of place of registration office of LLP (u/s 13 read with Rule 17)	Form 15	Within 30 days

Delay in filling E-form and documents will be a theft of time and money. Therefore, LLPs need to file E-form and documents on time and within the period otherwise, it will invite additional fees and condonation of delay procedure. Section 460 of Company Act 2013 read with Section 69 of LLP Act, 2008 and Section 69 explain about payment of additional fees.

Summary Of Implication Of Applicability Of Section 460 Of Company Act On Llps

The purpose of applying Section 460 of the Company Act to LLPs is seen as a part of government effort in tracking doubtful companies and to have a stricter compliance environment. A large number of LLPs not filling their information regarding the LLP agreement and their changes, notice of appointment of partners and designated partners, and annual documents. Due to this electronic registrar not updated and not available to stakeholder for inspection.

LLPs have easier compliance norms as a result of which there is a limitation of the power of ROC to inspect the affairs of such LLPs but imposing more provisions of the Act would give power to ROC regarding inspecting and inquiry of LLPs. Imposing more compliance norms will help MCA to unmask unauthorised and doubtful organisations which is registered under LLP. As per this notification3 Central Government in exercise of their power u/s 460 of Company Act 2013 has introduced “LLP settlement scheme 2020” and as per this scheme Government allows onetime condonation of delay in filling statutorily required documents with the registrar⁴. It will give immunity to LLPs from prosecution and reduce addition fees.

This amendment helps those LLPs, who are belated to file their documents with ROC for their good without facing any prosecution and penalty.

Procedure of filing application of condonation of delay with CG in Form CG-1 along with⁵–

Copy of appointment of authorized representative along with registration application
Application of condonation of delay
Affidavit indemnifying petition
Memorandum of appearance
Letter of authorization

CG will scrutinize the application and issue the final order for accepting or rejecting the application. The order passed by CG with Form INC – 28 along with required documents and fees filed to the Registrar of Company. LLPs have to file respective documents along with Form INC – 28 with ROC

for which condonation of delay application will be accepted.