LLP Settlement Scheme, 2020

LLP settlement Scheme, 2020 : One-time condonation of delay in filing statutory documents

Start Date : 01.04.2020

End Date: 30.09.2020

As a part of Government's initiative of ease of doing business, Ministry of Corporate Affairs has come up with LLP Settlement Scheme which allows One-time condonation of delay in filing statutorily required documents with the Registrar.

Limited liability Partnership is a form of corporate structure that combines the flexibility of partnership of partnership firms and limited liability of a company. Due to applicability of huge additional fee on late filing, a large number of Limited Liability Partnerships (LLPs) have remained non-compliant, as high payment of late fees for the cumulative period of delay makes LLPs unable to pay.

Under this scheme any “defaulting LLP” is permitted to file belated documents which were due for filing till 31^st August, 2020. Provided that no additional fee shall be payable for filing any belated documents under this scheme.

However, this scheme shall not apply to LLPs which have already filed Form 24 to the Registrar for strike off of LLP.

Applicability of Scheme - This scheme is applicable to following forms only -

(i) Form-3- Information with regard to limited liability partnership agreement and changes, if any, made therein;

(ii) 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;

(iii) Form-8- Statement of Account & Solvency (Annual or Interim); and

(iv) Form 11 - Annual Return of Limited Liability partnership (LLP)

Benefits of LLP Settment Scheme 2020 –

1. Meet non-compliance in LLPs without any additional fee.

2. Make LLPs operational without any non-compliance by filing all pending forms.

3. The defaulting LLPs, which have filed their pending documents till 30^th September 2020 and made good the default, shall not be subjected to prosecution by the Registrar for such defaults.

4. There are LLPs which have not filed annual forms 8 and 11 for 10 years and for them penalty would be normally 4 lakhs or more. Now, they can clear the default by simply paying normal applicable fee.

5. Make life easier for businesses which might be facing problem due to non-filing of returns.

6. There are LLPs which are not in operation but could not strike off just because of non-filing of annual forms 8 and 11 and unless annual filing is completed strike off can not be done. These all such LLPs can easily opt for strike off just by completing all non-filing at minimal penalty.