prpri LLP Settlement Scheme, 2020- Applicability and Key Points LLP Settlement Scheme, 2020- Applicability and Key Points

LLP Settlement Scheme, 2020 has been introduced by the central government vide its power u/s 460 of the Companies Act, 2013.  It has been notified vide Circular No 6/2020 dated 04-03-2020 and amended further vide Circular 13/2020 date 30-03-2020.

Applicability of LLP Settlement Scheme, 2020:

LLP Settlement Scheme, 2020 is applicable to any defaulting LLP i.e. LLP registered under Limited Liability Partnership Act, 2008 and which has made default in filing of documents on the due dates specified under LLP act 2008 and the rules made there under and which were due to be filed till 31st October, 2019.

Effective Date:

The scheme shall come into force with effect from 1st April, 2020 and shall remain in force up to 30th September, 2020.

Key Points:

  • Due to non-compliance of many LLPs in general, the records available in the electronic registry are not updated and they are not available to the stakeholders for inspection.
  • And also due to not filing the requisite documents on time the LLPs and their designated partners are liable for criminal prosecution and the said LLPs cannot be closed till all the compliances are completed.
  • To promote ease of doing business and to serve as a complaint LLP in future it has been decided to give a onetime relaxation in additional fees to the defaulting LLPs.
  • As per the above circular additional fee of Rs 10/- per day has to be additionally paid if any prescribed form under the circular has not been filed or registered and the payment of such additional fee shall not exceed Rs 5000/- per document. The above additional fees have been completely waived of 2020 vide circular 13/2020 dated 30-03-2020.
  • The documents prescribed by the MCA in its circular are as follows: Type Application
1 Form 3 Information with regard to limited liability partnership agreement and changes, if any, made therein
2 Form 4 Notice of appointment, cessation, change in name/ address/designation of a designated partner or partner. and consent to become a partner/designated partner
3 Form 8 Statement of Account & Solvency
4 Form 11 Annual Return of Limited Liability Partnership (LLP)
  • This scheme shall not apply to LLPs which made application in Form 24 to the registrar, for striking off its name from the register as per the provisions of LLP Rules, 2009.
  • The defaulting LLPs which have filed their pending documents till 13th June, 2020 and made good the default, shall not be subjected to prosecution by Registrar for such defaults. The earlier date of 13th June, 2020 has been substituted by 31st august, 2020 vide circular 13/2020 dated 30-03-2020.
  • On the conclusion of scheme i.e. after 30th September, 2020 the registrar shall take necessary action under the LLP Act, 2008 against the LLPs which have not availed this scheme and are in default in filing of documents as required under the provisions of LLP Act, 2008 in a timely manner.

Disclaimer: The information contained herein is of a general nature and is not intended to address the circumstances of any person or entity. Although I endeavor to provide accurate and timely information, there is no guarantee that such information is accurate as of the date it received or that it will continue to be accurate in the future. No one should act on such information without being sought professional advice for the relevant situation.

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Qualification: CA in Practice
Company: Avinaash Dadi & Co
Location: Visakhapatnam, Andhra Pradesh, IN
Member Since: 14 Apr 2020 | Total Posts: 2

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July 2021