ABC LLP is engaged in the business of providing software consulting services. Due to an economic slowdown, the LLP is unable to meet its obligations…

(a) According to section 60 of the Limited Liability Partnership Act, 2008, (1) Where a compromise or arrangement is proposed: (a) between a limited liability partnership and its creditors; or (b) between a limited liability partnership and its partners, the Tribunal may, on the application of the limited liability partnership or of any creditor or partner of the limited liability partnership, or, in the case of a limited liability partnership which is being wound up, of the liquidator, order a meeting of the creditors or of the partners, as the case may be, to be called, held and conducted in such manner as may be prescribed or as the Tribunal directs. (2) If a majority representing three-fourths in value of the creditors, or partners, as the case may be, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Tribunal, by order be binding on all the creditors or all the partners, as the case may be, and also on the limited liability partnership, or in the case of a limited liability partnership which is being wound up, on the liquidator and contributories of the limited liability partnership. Provided that no order sanctioning any compromise or arrangement shall be made by the Tribunal unless the Tribunal is satisfied that the limited liability partnership or any other person by whom an application has been made under sub-section (1) has disclosed to the Tribunal, by affidavit or otherwise, all material facts relating to the limited liability partnership, including the latest financial position of the limited liability partnership and the pendency of any investigation proceedings in relation to the limited liability partnership. (3) An order made by the Tribunal under sub-section (2) shall be filed by the limited liability partnership with the Registrar within thirty days after making such an order and shall have effect only after it is so filed. (4) If default is made in complying with the provisions of sub-section (3) , the LLP and its every designated partner shall be liable to a penalty of 10,000 and in case of continuing default, with further penalty of 100for each day after the first during which such default continues, subject to maximum - 1,00,000 for LLP and - 50,000 for every designated partner. In the given question, the compromise or arrangement is approved by creditors representing 80% (exceeding the required three-fourths) and sanctioned by the NCLT after due disclosures, hence the arrangement is valid. Effect of failure to file the Tribunal's order with the Registrar by ABC LLP As per the provision of sub-section (3) and sub-section (4) of Section 60 stated above, the order of the Tribunal will be effective only after it is filed with the Registrar and therefore, the non-filing of the same renders the order non-effective and the LLP as well as the every designated partner shall face the penal consequences stated in sub-section (4) .