• Notification Date: 14-02-2022
• Notification No: N/A

MCA Orders New Naming for the Existing LLPs

The Ministry of Corporate Affairs (MCA) has declared the ruling for the LLPs to allot new names for the existing firms. The government has passed the order that the Limited Liability Partnership Rules, 2022 will be effective from 1 April 2022.

In the matter of allotting new names to the existing Limited Liability Partnership firms, a new Rule has been added under the Act. Rule 19A has been added under Section 17(3) which mentions the new rule as prescribed by the Government.

In case, any LLP firm fails to rename the company as per Rule 19A, the company shall be automatically renamed by the government within three months of issuing the direction under Section 17(1). The new name of the Limited Liability Partnership firm will be the letters “ORDNC” which means Order of Regional Director Not Complied, followed by the year of passing the direction, the serial number and the existing LLPIN of the Limited Liability Partnership firm.

The renaming of the LLP Company will be done without any further act or deed made by the LLP, in case it fails to rename the firm within the due time. The Registrar will make the entry of the new name of the LLP in the register. The Registrar shall issue a new Certificate of Incorporation for the LLP with the new name in Form No. 16A.

If the e-Form for the LLP, that is Form No-5 of the firm, is pending for being expired even after the deadline of three months gets over, the sub-rule (1) under Section 17 shall not be applicable for that LLP firm. The provisions under Section 17(1) shall not apply to the firm if the expiry is still pending after the completion of the period of expiry from the issue date by the Regional Director unless it is subsequently rejected.

The LLP companies whose names have been altered by the Registrar under Section 17(3) are required to file the necessary compliance as per the provisions specified under Section 21. Below the new name of the company, “ORDNC” which means Order of Regional Director Not Complied shall also be mentioned in brackets. The statement shall be mentioned below the name of the LLP on its invoices, official correspondence, as well as its publications.

The Limited Liability Partnership companies that have already changed their names following the Rule under Section 19 will not have to use the statement ‘Order of Regional Director Not Complied’ along with its name.

The Central Government shall appoint its officers who are equal or above the rank of the Registrar for adjudging penalties for the companies as adjudicating officers under the Act. The officer shall issue a notice to the concerned Limited Liability Partnership firm before charging the penalty. The notice shall be issued in the name of the concerned person such as the designated partner of the LLP who has failed to make the compliance or has made some defaults under the Act. The notice shall be issued seeking the show cause for the delay or non-compliance by the person within a definite period. The notice shall specify the reason for imposing the penalty charges on the LLP firm.

The notices issued under Section 17(2) are required to specify the nature of the non-compliance defaulter. It should mention the specific penal provisions of the Act. The maximum charges of penalty applicable on the partner or designated partner of the LLP should also be mentioned in the notice under Limited Liability Partnership Act.