Introduction:
A LLP is a business arrangement whereby the liability held by each of the partners is limited by law. The LLP business vehicle is a legal entity having its existence independent from its partners where their rights and duties are determined in terms of the agreement between them, owing such flexibility in nature small enterprises preferred the LLPs.
But large number of LLPs are not filing their statutory documents with the registrar in a timely manner due to which LLPs and their designated partners are liable for criminal prosecution and huge financial burden also imposed on them in the form of additional fee and the LLPs cannot be closed till all compliances are completed.
To overcome difficulty , the Government promulgated LLP Settlement scheme 2020, as a part of ease of doing business 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 complaint LLP in future.
What is LLP Settlement scheme 2020
The defaulting LLP (which has made default in filing of documents in due dates specified under LLP Act,2008) can file the documents which were due for filing till 31st October, 2019 on payment of additional fees of Rs. 10/-per day instead of Rs. 100/- per day provided that such payment of additional fees shall not exceed Rs. 5000/- per documents.
Following documents can be filed under the scheme:
- Form-3 Filing of LLP Agreement and changes thereon
- Form-4 Notice of appointment, cessation, change in name/ address/ designation of designated partners and consent to become partner/designated partner
- Form-8 Statement of Account & Solvency
- Form-11 Annual return of LLP
Scheme shall not apply on:
LLPs which has made an application in form 24 to the registrar for striking off its name from the register.
Timeline:
Enforcement date of scheme is 16th March 2020 and shall remain in force up to 13th June, 2020.
Conclusion:
Defaulting LLPs may themselves avail of the scheme for filing documents which have not been filed and can take the benefit till 13th June 2020 afterwards the registrar shall take necessary action against the LLPs which have not availed the scheme and are in default in filing of documents as required under the provisions of LLP Act 2008 in a timely manner.
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