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. It is also noted that a large number of LLPs are not filing their due statutory documents which are required to be filed with the prescribed fee.
Due to this, the records available in the electronic registry are not updated and they are not available to the stakeholders for inspection.
Government also receivced representations from many stakeholders to provide opportunity to make pending compliances good. Therefore, Ministry in order to tackle COVID-19 threat and to reduce the compliance burden decided to give a Onetime relaxation in additional fees to the defaulting LLPs to make good their default by filing pending documents and to serve as a compliant LLP in future.
Hope all stakeholders will get answer of their query from following FAQs:-
Q1) Analysis of Modified LLP Settlement Scheme, 2020?
A.1. It is a Onetime relaxation by waiver of additional fees given to defaulting LLPs to make good their default by filing pending all forms that are required to be filed under the provisions of LLP Act, 2008 and rules made there under and to serve as a compliant LLP in future.
Q2) What is the motive of Ministry to launch this Scheme?
A.2. The Ministry of Corporate Affairs, received many representations from Corporates and to address the COVID-19 threat and to reduce the compliance burden promote ease of doing business, has decided to introduce a scheme namely “LLP Settlement Scheme, 2020”. This Scheme allow One-time condonation of delay in filing statutorily required documents with the Registrar.
Q3) Does this scheme launched permanently?
A.3. No, it is one time relaxation, 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 to make good their default by filing pending all forms, documents and to serve as a compliant LLP in future.
Q4) When does this Scheme comes into force?
A.4. Earlier, the Scheme shall come into force on the 16th March, 2020 and shall remain effective up to 31st March, 2020 (both days inclusive).
But time period of the revised Scheme is from 1st April, 2020 and shall remain effective up to 30th September, 2020 (both days inclusive).
Q5) What do you mean by Defaulting LLPs?
A.5. “Defaulting LLP” means a LLP registered under the Limited Liability Partnership Act, 2008 which has made a default in filing of documents on the due date(s) specified under the LLP Act, 2008 and rules made there under.
Q6) What are belated documents as per the Scheme?
A.6. “Belated documents” means all forms that are required to be filed under the provisions of LLP Act, 2008 and rules made there under.
Q7) Is there any application required to be file with ROC to avail this Scheme?
Q8) What are the following documents on which such scheme is not applicable?
A.8. Scheme shall not be apply to the filing of documents except the following:
iii. Form-8; Statement of Account & Solvency (Annual or Interim);
Q9) If My LLP wants to claim benefits of this Scheme then what will be the conditions need to be fulfilled?
A.9. Any defaulting LLP is permitted to file belated documents/forms which were due for filing till August 31, 2020, can avail the benefits under this Scheme.
Q10) Which LLPs are excluded from such Scheme?
A10. This Scheme shall not be apply to LLPs which have made applications in Form 24 to the Registrar, for striking off their name from the Register as per Provisions of Rule 37(1) of LLP Rules, 2009.
Q11) What shall be the manner of payment of fees and additional fee on filing belated document for seeking immunity under the Scheme?
A11. Initial Scheme Says,
Eg: If there is delay of 750 days, then additional fee for the form at the rate of Rs. 10 per day works out to Rs. 7,500 > Rs. 5,000 and therefore additional fee will be Rs. 5,000 for the form.
Thus, Additional fee of Rs 10 per day is payable per document subject to maximum of Additional fees not exceeding Rs. 5,000/- per document; whereas
Modified LLP Settlement Scheme says,
No additional fees are payable under the Revised Scheme dated 30th March, 2020 vide Proviso of Point no. (iv) of Para 8A inserted after Point 8 of circular dated 04.03.2020 w.e.f 01.04.2020.
Comment: According to me No additional fees is required to be paid now but professionals are advised to check first by generating Pay Fee Later Challan.
Q12) Will my LLP be able to avail benefits of this scheme as decision to Strike off is approved by the partners?
A12. The scheme is not applicable on the LLPs who had filed Form 24 with the ROC for striking off their names from the Register. Thus if LLP had just approved among partners and not filed form with the registrar yet then LLP can avail benefits of the Scheme.
Q13) Documents for which period in the past, a defaulting LLP is permitted to file?
A.13. “defaulting LLP” is permitted to file belated documents, which were due for filing till 31st August, 2020 in accordance with the provisions of this Scheme.
Q14) On which LLPS, registrar shall take necessary action under the LLP Act, 2008?
A14. After 30th September, 2020 the registrar shall take necessary action under the LLP Act, 2008 against the LLPs which have not availed the Scheme and are in default in filing of documents as required under the provision.
Q15) Is there any immunity from prosecution in respect of document(s) filed under the scheme?
A.15. Yes, the defaulting LLPs, which have filed their pending documents till 30th September, 2020 and made good the default, shall not be subjected to prosecution by the Registrar for defaults in filing of forms and documents by the due date.
Q16) From when my LLP will be able to avail benefits of such Scheme?
A.16. initial scheme leads to availment of benefits from 16th March, 2020 to 31st March, 2020 (both inclusive) but Modified Scheme launched on 30th March, 2020 leads to availment of benefits from 1st April, 2020 to 30th September, 2020 (both inclusive)
Q17) Which LLPs are not subject to Prosecution in respect of document(s) filed with registrar?
A.17. The defaulting LLPs which have filed their belated documents till 30th September, 2020 and made the good default, shall not be subject to Prosecution.
Q18) If my LLP has filed Form 24 with the Registrar will it be able to avail benefits of such Scheme?
A18. It is given that if any LLP had filed an application Form 24 for Striking Off its name from the Register of Registrar of Companies then it will not be able to avail such benefits.
Q19) Why government launch such Scheme?
A19.) To promote Ease of Doing Business
Q20) What action Registrar can take on the defaulting LLPs which have not availed this Scheme after conclusion of the same?
A.20. On the conclusion of the Scheme 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. The defaulting LLPs may be subjected to prosecution by Registrar for such defaults.
CONCLUSION: It is Golden Opportunity for the Limited Liability Partnerships concern to make their compliances good and contribute towards welfare of the country and make it easy for Ministry also to proceed further smoothly.
DISCLAIMER: The article is based on the relevant provisions and as per the information existing at the time of the preparation. in no event i shall be liable for any direct and indirect result from this article. this is only a knowledge sharing initiative.
THE AUTHOR – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can be reached at [email protected] or 9910248911.