MCA’s Condonation Scheme for Delay in Filing LLP Forms (3, 4, 11)

In a recent circular (MCA General Circular 08/2023 dated 23/08/2023), the Ministry of Corporate Affairs (MCA) has introduced a condonation scheme for delays in filing Form-3, Form-4, and Form-11 under Section 67 of the LLP Act, 2008 in conjunction with Section 460 of the Companies Act, 2013.

Background: Problem in Filing LLP Forms

The scheme came in the wake of representations from various LLPs citing 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). Typical problems included mismatches with the master data in the MCA’s electronic registry, leading to a failure in updating the records.

One Time Relaxation: The Solution

To negate these problems and align with the government’s initiative of promoting ease of business, the MCA decided to offer one-time relaxation in additional fees. The objective is to aid LLPs struggling with filing these forms within due dates, and thus, offer an opportunity to update their data for future compliance.

Key Aspects of the MCA’s Condonation Scheme for LLPs

Following are the salient features of this scheme:

i) Straight Through Process (STP) Mode: The scheme stipulates processing of Form-3 and Form-4 under the STP mode, barring changes in business activities. It advises stakeholders to file forms in sequential order, according to the date of events, to update the master data systematically.

ii) Onus of Correct Filing: Although these forms will contain pre-filled data as per existing master data of the LLP, stakeholders can edit the information. Responsibility for correctness of data lies entirely with stakeholders. In case of misrepresentation, the Designated Partner and the professional certifying the form may face penalties under law.

iii) Fee Waiver & Conditional Additional Fees: Fees for Form-3 and Form-4 filings will be waived for events dated 01.01.2021 and onwards. Events prior to this date will attract additional fees, twice and four times the normal filing fees for small LLPs and other LLPs, respectively. Similar conditions apply to Form-11, applicable to the financial year 2021-22 onwards, with additional fees for filings pertaining to previous years.

iv) Validity of the Scheme: The window for filing these forms will commence from 01.09.2023 and will continue till 30.11.2023.

v) Exemption from Legal Consequences: LLPs availing this scheme will not face any legal consequences for delayed filings of Form-3, Form-4, and Form-11.

The MCA’s new scheme provides a viable solution to LLPs grappling with delays in form submissions and ensuring that their data on the MCA’s registry stays up-to-date. It underscores the commitment of the MCA to ease processes and assist businesses in maintaining compliance.

MCA General Circular 8/2023 dated 23/08/2023: Condonation Scheme for Delay in Filing LLP Forms (3, 4, 11)