MUMBAI, Feb. 19 (Xinhua) -- India's Ministry of Corporate Affairs (MCA) has extended the rules contained in its Companies Act to cover the limited liability partnerships (LLPs), calling for significant disclosures.

In an update notified on its website on Friday, the ministry said that stakeholders are hereby informed that certain sub-sections of Companies Act will be extended to cover LLPs.

"Accordingly, limited liability Partnerships, Partners and Designated partners thereof are advised to take note of the same for appropriate action," it said.

The intent behind the disclosure is to find out the real beneficial owner in an entity, experts said.

In the recent past, several Indian companies had made a shift towards LLP structure due to less compliance requirements. According to a MCA report in January, over 14,700 companies had converted to LLPs till date.

"The extension of Companies Act provisions to Limited Liability Partnerships will now make disqualification of partners in LLP as was applicable for directors on the board of companies," said Makarand Joshi, partner at MMJC & Associates LLP.

The MCA has disqualified over 300,000 defaulting directors, many of whom had subsequently started activities in the LLP format. The extension of provisions may now debar such partners in LLPs too, Joshi said. Enditem

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