Partner of LLP not eligible to become or continue as Designated Partner for five years on failure to file Financial Statements for any continuous three Financial Years: MCA [Read Notification]

The Ministry of Corporate Affairs (MCA) has notified the Partner of LLP not eligible to become or continue as designated partner for a period of five years on failure to file financial statements for any continuous period of three financial years.

In section 90 of the Limited Liability Partnership Act, 2008, in sub-section (1) to sub-section (11) for the word “shares”, wherever it occurs, the word “contribution” shall be substituted; for the word “company” wherever it occurs, the words “limited liability partnership” shall be substituted; for the word “member” wherever it occurs, the word “partner” shall be substituted; for the word “officer” wherever it occurs, substitute the words “partner” or “designated partner” shall be substituted.

In section 164, for sub-section (2), the following shall be substituted, namely no person, who is or has been a director of a company or designated partner of limited liability partnership, as the case may be, which has not filed financial statements or the Statement of Account and Solvency or annual returns, as the case may be, for any continuous period of three financial years; or has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay the interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more, shall be eligible to become or continue as a designated partner of that limited liability partnership or to become a designated partner in other limited liability partnerships for a period of five years from the date on which the said company or limited liability partnership fails to do so. Provided that where a person becomes as a designated partner of a limited liability partnership which is in default of clause (a) or clause (b), he shall not incur disqualification for a period of six months from the date he becomes designated partner.”.

In section 165 for sub-section (3), the following shall be substituted, namely Any person holding office as designated partner in limited liability partnerships more than the limits as specified in sub-section (1) ,immediately before this notification shall, within a period of one year from such notification ,choose not more than specified limit of those limited liability partnerships , as limited liability partnerships in which he wishes to continue to hold the office of designated partner; resign his office as a designated partner in the other remaining limited liability partnerships; and intimate the choice made by him under clause (a), to each one of the limited liability partnerships in which he was holding the office of designated partner before such notification and Registrar having such jurisdiction in respect of each limited liability partnership.

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