LLP settlement Scheme 2020 – Opportunity to Defaulting LLPs

LLP settlement Scheme 2020

As per section 69 of LLP Act, 2008 :

Any document or return required to be filed or registered under this Act with the Registrar, if, is not filed or registered in time provided therein, may be filed or registered after that time upto a period of three hundred days from the date within which it should have been filed, on payment of additional fee of one hundred rupees for every day of such delay in addition to any fee is payable for filing of such document .

Additional fee of one hundred rupees for every day creates excessive financial burden on LLPs . It has come to the notice of government because of this financial burden number of LLPs have defaulted in filing Forms.

A large number of representations were received from various quarters for waiver of fee or condonation of delay and relaxations in additional fee on the ground of excessive financial burden.

Introduction of New LLP settlement Scheme 2020:

As part of Government’s constant efforts to promote ease of doing business it has been decided to give a Onetime relaxation in additional fees to the defaulting LLPs by filing pending documents and to serve as a compliant LLP in future.

The Central Government in exercise of its power u/s 460 of the Companies Act, 2013 has decided to introduce a scheme namely “LLP Settlement Scheme, 2020”. By introducing this scheme Government allows onetime condonation of delay in filing statutorily required documents with the Registrar.

The details of the scheme are as under:

1. This scheme shall come into force on the 16th March, 2020 and shall remain in force up to 13th June, 2020
2. Applicability: – Any “defaulting LLP” is permitted to file belated documents, which were due for filing till 31st October, 2019 in accordance with the provisions of this Scheme.

Manner of payment of fees and additional fee on filing belated document for seeking immunity under the Scheme –

Additional fee Rs 101 – per day for delay in addition to any fee as is payable for filing of such document provided that such payment of additional fee shall not exceed Rs. 5,0001 – per document.

Immunity from prosecution:

The defaulting LLPs, which have filed their pending documents till 13th June 2020 under the scheme and made good the default, shall not be subjected to prosecution by Registrar for such defaults.

This scheme excludes following documents:

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-S; Statement of Account & Solvency (Annual or Interim)
4. Form-11- Annual Return of Limited Liability Partnership (LLP).
5. The LLPs which has made an application in Form 24 (i.e. for striking off its name from the register as per provisions of Rule 37(1) of the LLP Rules, 2009) to the Registrar are also excluded from this Scheme.

Comparison:

Conclusion:

1. On the conclusion of the Scheme, the Registrar shall take necessary action under the LLP Act, 2008 against the LLPs which have not availed this Scheme .
2. Every LLP should file all the pending documents and serve as a compliant LLP in future.