LLP compliance set to get stricter as MCA applies sections of Companies Act to LLP Act : 19-02-2021

In a transfer geared toward enhancing the compliance of restricted legal responsibility partnerships (LLPs) and to higher regulate designated companions, the ministry of company affairs (MCA) has determined to prolong sure sections of the Companies Act to the LLP Act.

A complete of eight sections relating to the register of vital helpful homeowners, disqualifications of administrators, conduct of inquiries and inspections and non-cognisable offences will quickly be relevant to LLPs, the MCA stated in an intimation on Thursday.

“The changes are to fill the gaps in the LLP Act by applying the sections of the Companies Act to LLPs, as has been done in the past,” a senior authorities official stated.

While these sections will likely be modified to match into the LLP Act, relating to which a notification is predicted to be out quickly, “limited liability partnerships, partners and designated partners thereof are advised to take note of the same for appropriate action”, the ministry stated.

“One significant change is the application of the clause triggering disqualification of directors of a company that has not complied with filings for three years to LLPs,” stated Ankit Singhi, accomplice at Corporate Professionals.

Clauses of Section 164 of the Companies Act, which state {that a} director of an organization which has defaulted on submitting monetary statements or annual returns for 3 consecutive years will likely be disqualified as director, shall apply to LLPs.

Similarly, those that selected to kind LLPs to keep away from disclosure of helpful possession will now have to disclose this info as clauses of Section 90 of the Companies Act may also apply to LLPs, Singhi stated.

Section 67 of the LLP Act permits the federal government to apply sections of the Companies Act to the LLP Act by approach of notification.

However, for the reason that transfer is within the nature of amendments to the LLP Act, Parliament’s approval will likely be required as the notification have to be positioned in each Houses, the official stated.

Designated companions (DP) of LLPs would want to construction their partnerships, in accordance to Sumit Naib, director at Nangia Andersen India, as the ministry plans to introduce curbs on the quantity of LLPs by which an individual might be appointed as DP.

Source : Times of India