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Limited Liability Partnership’s Exit now shifted to Centre for Processing Accelerated Corporate Exit (CPACE) - MMJC
Introduction:
One among the multiple objectives of adopting technology by Ministry of Corporate Affairs (MCA) is, to reduce human intervention in the process and make it smoother and more efficient. One step taken in this regard by MCA is introduction of CPACE for processing the strike off applications of the companies.
MCA has now given the authority to CPACE to look after exit of Limited Liability Partnerships (LLP) as well. In this article, we shall understand about this applicability and its consequences for LLPs.
Background:
The concept of CPACE was introduced by MCA through notification dated 17th April 2023. Through this notification, ministry assigned to CPACE, the ROC’s authority to strike off the companies as per the applicable provisions of the companies act 2013.
The CPACE was constituted by MCA under section 396 of the companies act 2013 and was given all rights of ROC with respect to strike off of the companies. This centre was created in order to remove the human intervention in the process of strike off and make it faceless, fast, and efficient.
Authority to CPECE under LLP Act 2008:
Now through notification dated 5th August 2024, MCA has given the authority to strike off LLPs to CPACE. Hereafter, CPACE shall be responsible for conducting all processes relating to strike off of LLPs under rule 37 of LLP rules. MCA has amended rule 37 of LLP rules by adding words, “centre for processing of accelerated corporate exit after the word ‘registrar’ in sub-rules 1, 2 and 3 of rule 37. Also, an explanation has been inserted which says that CPACE refers to the same CPACE established under companies act 2013.
Implications:
Like companies, CPACE shall help speed up the process of corporate exit for LLPs making the exit easy for the businesses. Also, reduction in human intervention in the process make it error free and efficient serving the larger purpose of bringing ease of doing business with the help of technology.