LLP Settlement Scheme for defaulting LLPs

Table of Contents

What is the LLP Settlement Scheme?

The MCA has launched the Limited Liability Partnership Settlement Scheme, 2020. MCA is the Ministry of Corporate Affairs. They observed that applicability of additional fee on late filing became a financial burden. And a large number of Limited Liability Partnerships (LLPs) have remained non-compliant. Mainly on account of the inability to pay late fees for the cumulative period of delay.

Hence, they allowed a One-time relaxation in an additional fee to the defaulting LLPs. This helps them to make good on their defaults by filing pending documents and become compliant. This is in line with the Government’s constant efforts to promote ease of doing business. So with this, The Government introduces the LLP Settlement Scheme 2020.

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The Central Government introduced a scheme called “LLP Settlement Scheme, 2020”. It allows a One-time condonation of delay in filing required documents with the Registrar. LLPs, that wish to avail themselves of the scheme, may file the pending documents/Forms. On doing so, they also gain immunity from prosecutions for such defaults.

1. Effective date:

This scheme shall come into force on the 16th March, 2020 and shall remain in force up to 13th June, 2020.

2. Applicability:

The Scheme permits any defaulting LLP to file belated documents/returns. However, it is only for those documents which were due for filing till 31st October, 2019. This Scheme shall not apply to LLPs which has made an application to the Registrar for striking off its name from the register.

3. Payment of Fees under the Scheme:

The defaulting LLPs availing the scheme still have to pay a fee. But a lesser fee compared to the normal late fee. A fee of Rs 10/ – per day for delay is payable for filing of any document or return under the scheme. Note that such payment of additional fee shall not exceed Rs. 5,000/ – per document.

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

The LLPs, which file their pending documents till 13th June 2020 make good on their default. Hence they shall not be subjected to prosecution by Registrar for such defaults.

5. This Scheme applies to the filing of following documents:

Sr No.	Form No.
1	Form 3
2	Form 4
3	Form 8
4	Form 11

View the Forms.

6. Non-Compliance/Non-Availment:

At the end of the Scheme, the Registrar shall take action 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.

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