As discussed for the reason of non-filing of the required returns by defaulting LLP several LLP remanded non-compliant resulting in the following consequences, which is precisely why the LLP Settlement Scheme 2020 has been announced.
The ROC records of the LLP is open for inspection by the stakeholders on payment of the prescribed fee, however as the LLP did not file requisite forms the records of the LLP are not updated and hence not available for inspection by the stakeholders.
Criminal Prosecution of Partners
Due to non-filing of LLP Form to the ROC the designated partners are liable for criminal prosecution
LLP is unable to close
As several LLP did not file Form 3 and annual returns in form 11 and form 8, the LLP can not be closed as it is a prerequisite before the LLP goes for liquidation or winding up.