LLP settlement Scheme, 2020

MCA vide its circular dated 4th March, 2020 has prescribed the LLP settlement Scheme, 2020 for those LLPs which have defaulted in filing of Form-3, Form-4, Form-8 and Form -11 (Details of Forms are mentioned below) by giving a one-time relaxation in additional fees to the defaulting LLPs to make good their default by filing said returns/Forms and to serve as a compliant LLP in future. This scheme shall come into force on the day of 16th March, 2020 and shall remain in force up to 13th June, 2020.

Important points of LLP settlement Scheme, 2020

a. Presently, In the event of requisite forms not being filed within prescribed time, LLPs may file such documents on payment of additional fee for one hundred rupees for every day of such delay under Section 69 of the LLP Act in addition to any fee as is payable for filing of such document or return.

b. It is also noted that a large number of LLPs are not filing their due statutory documents (i.e. Information with regard to LLP agreement and changes etc., Notice of Appointment of Partner/ Designate Partner etc. and other Annual filing documents i.e. Statement of Account & Solvency and Annual Returns) in a timely manner with the Registrar.

c. Due to this, the records available in the electronic registry are not updated and they are not available to the stakeholders for inspection. Further, due to not filing the required documents on time the LLPs and their designated partners are liable for criminal prosecution and the said LLPs cannot be closed till all compliances are completed.

d. 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 documents and to serve as a compliant LLP in future.

e. The Central Government in exercise of its power has decided to introduce a scheme namely “LLP Settlement Scheme, 2020”, by allowing a One-time condonation of delay in filing statutorily required documents with the Registrar.

Important Provisions of LLP settlement Scheme, 2020

1. Applicability of Scheme:

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.

This Scheme applies to the filing of following returns/Forms:

  • Form-3- Information with regard to limited liability partnership agreement and changes, if any, made therein;
  • 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;
  • Form-8; Statement of Account & Solvency (Annual or Interim);
  • Form-11– Annual Return of Limited Liability Partnership (LLP).

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

The defaulting LLPs may themselves avail of the scheme for filing documents which have not been filed or registered in time on payment of additional fee Rs 10/- per day for delay in addition to any fee as is payable for filing of such document or return, provided that such payment of additional fee shall not exceed Rs. 5,000/- per document.

3. Immunity from prosecution in respect of document(s) filed under the scheme

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.

4. Non applicability of LLP Scheme

  • This Scheme shall not apply to LLPs which has made an application in Form 24 to the Registrar, for striking off its name from the register as per provisions of Rule 37(1) of the LLP Rules, 2009.
  • The Scheme is not applicable to any form other than Form No. 3, Form No. 4, Form No. 8 and Form No. 11.

5. Action against Defaulting LLPs after expiry of Scheme

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 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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May 2021