Table of contents [Show]
Introduction
The Ministry of Corporate Affairs (MCA) recently imposed a penalty of ₹1.5 lakh on Arles Maxent Associates LLP (LLPIN: AAZ-1856) and its two designated partners for non-compliance with Section 13 of the Limited Liability Partnership (LLP) Act, 2008. This case highlights the critical importance of adhering to statutory requirements, such as maintaining a registered office and filing annual returns. Learn more about the company here.
Legal Framework: Section 13 of the LLP Act, 2008
Section 13 mandates that every LLP must:
- Maintain a registered office for official communications.
- Notify the Registrar of Companies (ROC) about any change in the registered office address.
- Ensure service of documents via registered post or prescribed methods.
Penalty for Non-Compliance:
- ₹500 per day for default, capped at ₹50,000 for the LLP and each partner (Section 13(4)).
The Adjudication Process
Complaint Received: A complaint dated 06.10.2023 alleged public cheating and failure to maintain the registered office.
Notices Issued: ROC Chennai sent notices under Section 38(1) on 22.03.2024, which were returned undelivered.
Ex-Parte Proceedings: Despite multiple hearing notices (20.08.2024 and 05.11.2024), the LLP and partners failed to respond or appear.
Penalty Imposed: A total penalty of ₹1.5 lakh was levied for 229 days of default (22.03.2024 to 05.11.2024).
Consequences of Non-Compliance
Loss of Small LLP Benefits: The LLP lost eligibility for concessions due to unfiled returns.
Maximum Penalty Applied: Despite a calculated penalty of ₹1,34,500 per entity, the cap of ₹50,000 was enforced.
Reputational Damage: Non-compliance risks legal scrutiny and erodes stakeholder trust.
Remedies Available
Appeal: The partners can appeal to the Regional Director (Chennai) within 60 days using Form ADJ.
Rectify Defaults: Update the registered office address and file pending returns immediately.
Penalty Payment: Pay ₹1.5 lakh online via the MCA portal within 90 days.
Precautions for LLPs
Regular Filings: Submit annual returns and financial statements promptly.
Monitor Registered Office: Ensure it’s operational and update changes to ROC.
Respond to Notices: Avoid ex-parte orders by engaging with regulatory communications.
Profiles of the Involved Entities
Company: Arles Maxent Associates LLP
Designated Partners:
Key Takeaways
This case underscores the MCA’s strict enforcement of compliance under the LLP Act. Proactive adherence to statutory obligations, timely filings, and responsiveness to notices are non-negotiable for LLPs to avoid penalties and legal complications.
Disclaimer
This blog is for informational purposes only. The interpretation of legal documents may contain errors, and readers are advised to consult a qualified professional before taking any action. The hyperlinked profiles are third-party links, and their accuracy is not guaranteed. The author disclaims liability for decisions made based on this content.
