Chapter IX - Investigation
Section 46
Section 46: power of inspectors to carry out investigation into affairs of related entities, etc
An LLP inspector may extend inquiry to relevant associated entities or present or former partners or designated partners, but needs prior Central Government approval and a show-cause opportunity for the subject.
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Need advice on Section 46?
This article is for general information. Refer to the Limited Liability Partnership Act, 2008 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) If an inspector appointed by the Central Government to investigate the affairs of a limited liability partnership thinks it necessary for the purposes of his investigation to investigate also the affairs of an entity which has been associated in the past or is presently associated with the limited liability partnership or any present or former partner or designated partner of the limited liability partnership, the inspector shall have the power to do so and shall report on the affairs of the other entity or partner or designated partner, so far as he thinks that the results of his investigation thereof are relevant to the investigation of the affairs of the limited liability partnership. (2) In the case of any entity or partner or designated partner referred to in sub-section (1), the inspector shall not exercise his power of investigating into, and reporting on, its or his affairs without obtaining the prior approval of the Central Government thereto: Provided that before according approval under this sub-section, the Central Government shall give the entity or partner or designated partner a reasonable opportunity to show cause why such approval should not be accorded.
Key takeaways
Core rule
An LLP inspector may extend inquiry to relevant associated entities or present or former partners or designated partners, but needs prior Central Government approval and a show-cause opportunity for the subject.
Operational step
Identify relevance to the LLP inquiry
How section 46 works
An LLP inspector may extend inquiry to relevant associated entities or present or former partners or designated partners, but needs prior Central Government approval and a show-cause opportunity for the subject.
Practical steps
Identify relevance to the LLP inquiry; seek prior Central Government approval; give the proposed subject an opportunity to show cause; limit reporting to relevant matters.
Practical preparation
Check these points against the Act and the relevant records.
- Identify relevance to the LLP inquiry
- Seek prior Central Government approval
- Give the proposed subject an opportunity to show cause
- Limit reporting to relevant matters.
Practical checklist
Do
- Identify relevance to the LLP inquiry
- Seek prior Central Government approval
- Give the proposed subject an opportunity to show cause
- Limit reporting to relevant matters.
Avoid
- Do not bypass the approvals, time limits or conditions stated in this section.
Illustrative example
Hypothetical: power of inspectors to carry out investigation into affairs of related entities, etc
An inspector sees transactions through a former partner’s associated company.
Step 1
Document the connection
Step 2
Seek prior approval
Step 3
Allow the company to show cause before approval.
Outcome
- The inspector may investigate the associated company only after the statutory approval process.
Glossary
- related entity
- An entity associated with the LLP whose affairs may be relevant to its investigation.
Frequently asked questions
What does section 46 provide?
An LLP inspector may extend inquiry to relevant associated entities or present or former partners or designated partners, but needs prior Central Government approval and a show-cause opportunity for the subject.
What should be checked in practice?
Identify relevance to the LLP inquiry; seek prior Central Government approval; give the proposed subject an opportunity to show cause; limit reporting to relevant matters.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026