LLP Act: Form Filing Extension!

On the 8th of March 2022, the Ministry of Corporate Affairs initiated a significant transition by migrating Limited Liability Partnership (LLP) forms from the V2 version to the V3 version. This migration process posed many challenges for different groups, especially professionals and entrepreneurs trying to follow the rules of the LLP Act of 2008 and its regulations.

• Professionals face difficulties in timely filing crucial forms such as Form 3 and Form 4, essential for updating LLP agreements, partners’ information, and contribution changes.
• Additionally, Form 8, used for submitting Statements of Account & Solvency, and Form 11, the Annual Return, faced delays in submission due to these migration challenges. Many forms remain outstanding owing to errors in data entry.
• The Ministry of Corporate Affairs (MCA) offered relief to LLP by extending a one-time fee waiver, as explained in Circular No. 08/2023 dated August 23, 2023. This is to help LLPs who couldn’t submit Form 3, Form 4, and Form 11 on time.
• Under this relaxation, LLP can now file Form 3 and Form 4 for event dates occurring after 01/01/2021 without incurring additional fees, while for event dates preceding 01/01/2021, they will be subject to additional fees of 2 times and 4 times the standard fees for small LLPs and other than small LLPs, respectively.
• Moreover, LLP can submit Form 11 for the financial years 2021-2022 and 2022-2023 without incurring any additional fees, but for previous years in 2021-2022, they will be subject to additional fees of 2 times and 4 times the normal fees for small LLPs and other than small LLPs, respectively.

Several salient features should be noted regarding this relaxation:

1. Form 3 and Form 4 will undergo processing under the Straight Through Process mode for all purposes, except when there is a change in the main objective of the business.

2. Form 3 and Form 4 must be filed in a sequential manner, and accordingly, master data will be updated.

3. These forms will be available for filing from 01.09.2023 onwards until 30.11.2023 (inclusive of both dates).

4. LLP availing themselves of this scheme will not face any repercussions for delayed filing of Form 3, Form 4, and Form 11.

5. Stakeholders bear the responsibility of submitting accurate data. In cases of misrepresentation, the designated partner and the certifying professional may be subject to adverse actions as per legal provisions.

Lastly, it’s important to define “Small LLP” as those whose contributions do not exceed Rs. 25,00,000/- and whose turnover remains below Rs. 40,00,000/- as of the reporting dates.

Frequently Asked Questions (FAQs) on LLP Form Filing

1. Can I Resubmit Form-3 LLP with the Same Event Date?
– Yes, it is possible to resubmit Form 3 LLP with the same event date, particularly to rectify any inaccuracies in the Master data, if required. This provision is applicable in cases of changes in agreements.

2. What Steps should be taken if Prefilled Master Data is Incorrect for Agreement Changes?
– In instances where the prefilled master data is incorrect due to changes in the agreement, stakeholders should follow a two-step process. Firstly, they are required to delete the inaccurate record and subsequently add a new record containing the correct details. Furthermore, if any records are missing, they should be incorporated using the “Addition” option in field no. 19 of the LLP Form-3, with the same event date.

3. Is There a Specific Sequence for Filing LLP Form-11?
– Yes, when filing Form-11 LLP, it must be done sequentially based on the financial year-end date.

4. What Notable Enhancements Have Been Made to LLP Form-3 During the Relaxation Period?
– During the relaxation period, LLP Form-3 lets you appoint or remove the same Designated Partner or Partner on the same date in one form. But remember, this option won’t be available to stakeholders after the relaxation period ends.

5. What Major Updates Have Been Implemented in Form 11?
– Several significant improvements have been made in Form 11, including the following:
– Field no. 6(a) and 6(b): Values will be populated from the current master and prefilled from field no. 9.
– Field no. 6(c) and 6(d): Values will be populated from the current master and prefilled from fields 7 and 8, excluding cessation records.
– Field no. 7 and 8: Master data as of the given date will be prefilled, and historical changes will be prepopulated for the respective financial year. These fields will also allow for multiple roles if they already exist in the system, as well as the option to add/delete rows. Valid DIN/PAN/Passport numbers will be verified.
– Field no. 9: This value will be populated from the master and will be editable, with the total matching the number of partners available in field no. 7 and 8, excluding those partners for whom a cessation date is available.

Conclusion

LLPs with pending forms now have the option to take advantage of a one-time relaxation in additional fees provided by the Ministry of Corporate Affairs (MCA). By doing so, LLP can avoid incurring extra fees and complete their compliance requirements at a lower cost, while also safeguarding themselves from potential repercussions resulting from delayed filing of forms 3, 4, and 11.