LLP Settlement Scheme, 2020 (Modified)

Good News for Defaulting LLPs by Central Government in the form of introduction of LLP Settlement Scheme, 2020

The Government of India through Ministry of Corporate Affairs (MCA) has taken several measures in the year 2020 to promote ease of doing business in India. One such measure is issuance of ‘LLP Settlement Scheme, 2020’. In first instance, the MCA issued General Circular No. 06/2020 dated 04.03.2020 giving several reliefs to the LLPs. In furtherance of its efforts, the MCA revised the LLP Settlement Scheme 2020 (modified) vide General Circular No. 13/2020 dated 30.03.2020.

The LLP Settlement Scheme 2020 (Modified) will allow a One- Time condonation of delay in filling statutory documents with Registrar. As mentioned above, the LLP Settlement Scheme 2020 (modified) has been introduced in pursuance of the government’s objective of providing greater ease of living to the citizens of the country and is expected to provide a significant relief and a window of opportunity for LLPs to abide by the law and conduct business accordingly

Key Features of old LLP Settlement Scheme 2020:

• The old Scheme was in force from 16^th March 2020 to 13^th June 2020.
• The scheme was applicable to file belated documents which were due for filing till 31^st October 2019.
• The additional fee was reduced from Rs.100 to Rs.10 per day during the period of default subject to maximum additional fee of Rs.5000/- per document/form.
• The old Scheme was not applicable on Form 3, Form 4, Form 8, Form 11
• The scheme was not applicable on LLPs which have filed the Form 24 for striking off name of the LLP.
• The MCA circular for old LLP Settlement Scheme 2020 can be accessed at the link below:

https://taxguru.in/corporate-law/llp-settlement-scheme-2020.html

Key Changes in Revised LLP Settlement Scheme 2020:

• Duration of the Scheme:- The scheme shall start from 01^st April 2020 and end on 30^th September 2020.
• Applicability:– The LLP Settlement Scheme 2020 (modified) shall be applicable on “Defaulting LLP”. The defaulting LLP can file the belated document with ROC which were due for filing till 31^st August 2020.The defaulting LLP means LLP which has made a default in filing of any document or form with ROC.
• Belated documents: It means all forms and documents which are mandatory to be filed with MCA 21 registry.
• Fees:During the scheme, the LLPs can file the document or form with ROC with normal fees only i.e. No additional fees will be charged for delayed filling.
• Immunity from Prosecution: The defaulting LLPs which have availed the benefit of the LLP Settlement Scheme 2020 and filed all the belated documents till 30^thSeptember, 2020for making their default good. In other words, the ROC shall not initiate any prosecution action against the LLP or office for such defaults.
• Non applicability of Scheme:The LLP Settlement Scheme 2020 shall not be applicable on LLPs which have filed Form 24 for striking off name of the LLP.
• Expected MCA Action after Scheme:After the closure of the LLP Settlement Scheme 2020 i.e. 30^th September,2020, the Registrar shall take necessary action under the LLP Act, 2008 against the LLPs and its officers which have not availed the benefits of the Scheme and are in default in filing of documents as required under the provisions of LLP Act, 2008 in a timely manner.

Now get the benefit of the Modified LLP Settlement Scheme at the right time for not only the relaxation of additional fees but also give immunity from prosecutions and proceeding by Registrar for such default

Link for Circular: The MCA Circular for LLP Settlement Scheme 2020 (modified) can be accessed by clicking on the link below: https://taxguru.in/company-law/mca-modifies-llp-settlement-scheme-2020.html

Forms on which LLP Settlement Scheme 2020 is applicable:

1. Form-3:Filing of LLP Initial Agreement or changes made therein.

2. Form-4:For appointment, cessation, change in name/ address/designation of a designated partner or partner and consent to become a partner/designated partner.

3. Form 5:Change in name of LLP.

4. Form-8:Financial statement filing i.e. Statement of Account &Solvency onAnnual or Interim basis.

5. Form-11: Annual Return.

6. Form 12:Form for intimating other address for service of documents.

7. Form 15: Change in registered office of the LLP

8. Form 22:Filing of the Order of Court/ Tribunal/ Central Government to ROC.

9. Form 23:Change in the name of LLP

10. Form 27: Registration of particulars by Foreign LLP.

11. Form 29: Notice of  (A)  change in  the  COI  or  registration;  (B)  change in names and addresses of any of the persons authorised  to  accept  service  on  behalf  of  a foreign  LLP (C)   change   in   the   principal   place   of business  in  India  of  FLLP  (D)  cessation  to have a place of business in India.

12. Form 31: Application for compounding of Offence.

Further the complete list of applicable forms can also be accessed by clicking on the link below: http://www.mca.gov.in/Ministry/pdf/CFSS2020_02042020.pdf

Again the FAQs issued by the MCA regarding LLP Settlement Scheme 2020 can be accessed by clicking on the link below: http://www.mca.gov.in/Ministry/pdf/FAQCFSS_15042020.pdf

FAQs on LLP Modified Settlement Scheme,2020

Q 1. If a LLP with the status of Under Strike Off or Defunct for past 3 or 4 Years, can avail benefit of LLP Modified Settlement Scheme,2020?

Ans: No

Q 2. Is there any maximum additional fees per form in LLP Modified Settlement Scheme,2020?

Ans: No, only normal fees per form shall be charged under this scheme.

Q 3. Is there any per day additional fees in LLP Modified Settlement Scheme,2020?

Ans: No, under this scheme there is Zero per day additional fees

Q 4. Whether a Defaulting LLP is required to file an application to the Registrar to avail the Settlement Scheme?

Ans: No defaulting LLP is not required to file any additional application to avail the scheme.

Q 5. If a defaulting LLP have not availed the scheme till 30^th September,2020 then what are the action Registrar can take on the defaulting LLP

Ans: On after 30^th 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.

Q 6. Is LLP Settlement Scheme,2020 is permanent?

Ans: No LLP Settlement Scheme, 2020 is One-time relaxation in additional fees to the defaulting LLPs to make good their default by filing certain pending documents and to serve as a compliant LLP in future.

Q 7. Is there any Form which a LLP has to file after availing the Scheme?

Ans: Till date and as per circular, the LLP has not to file any Form with ROC after availing the benefits of the scheme.