ALL ABOUT LLP SETTLEMENT SCHEME, 2020- AN OPPORTUNITY TO SETTLE ALL DUES OF LLP
All about the LLP settlement scheme 2020- The Central Government, i.e., Ministry of Corporate Affairs in the exercise of the power as provided under Section 460 of the Companies Act, 2013, vide its Notification No. G.S.R. 59(E) dated January 30, 2020, under Section 67 (2) of the Limited Liability Partnership Act, 2008 published in the official gazette has introduce a scheme called “Limited Liability Partnership Settlement Scheme, 2020” (“L.L.P. Settlement Scheme, 2020”) which will allow an opportunity for condonation of delay in filing of statutorily forms which are required to be filed with the Registrar of Company (“RoC”). It is decided that one-time opportunity will be provided to all the L.L.P.s who had made defaults in the filling of different forms with RoC, i.e., One-time relaxation in additional fees to all the defaulting L.L.P.s will be provided in order to make all L.L.P. as fully compliant till date and work freely in future. The step is taken in view of promoting ease of doing business in India. L.L.P. is an alternative of the corporate business form where all benefits of corporate are being provided to partners like limited liability, less compliances, and others.
L.L.P. plays a critical role in India. However, it has been seen that most of the L.L.P.s have little knowledge about the filing of forms and doing other compliances as required under the law. Due to this reason, thousands of L.L.P.s in India delayed or make default in filing of various forms, i.e., Form 3 (L.L.P. Agreement) and changes therein, Form-8 (Statement of Account & Solvency-Annual or Interim) and Form-11– Annual Return by L.L.P. It has been provided under the law if any L.L.P. fails to file the respective forms, additional fees amounting to 100 for every day of such delay is payable- Section 69 of the L.L.P. Act. The step is taken in view of a large number of representations being received by the Central Government.
L.L.P. settlement Scheme, 2020, shall come into effect from March 16, 2020, and shall be have a validity period up to June 13, 2020. This is a significant step taken by the Central Government in order to give relief from the financial burden and make the L.L.P.s default-free. The Scheme will be applicable only on defaulting L.L.P.s and defaulting L.L.P.s are allowed to file the respective forms, in other words, belated documents that were due to be filed up to October 31, 2019. Instead of paying INR 100/- per day, L.L.P.s are required to pay only 10/- per day. The late fees will be in addition to the fees of the forms or documents to be filed and the maximum cap. Is being restricted at INR 5,000/- per document.
LLP SETTLEMENT SCHEME, 2020 CAN BE UNDERSTOOD THROUGH BELOW CHART:
LLP Settlement Scheme, 2020
|Notification No.||General Circular No. 6/2020 Dated March 4, 2020.|
|Meaning of defaulting LLP||“Defaulting LLP” means a LLP registered under the Limited Liability Partnership Act, 2008 which has made a default in filing of documents due for filing till 31st October, 2019;|
|Documents/ forms/returns to whom this scheme applies||Form 3:- Information(s) with regard to LLP; Agreement or about any changes in Agreement;
Form 4:- Notice of appointment, cessation, change in name & address/designation of a designated partner(s) and consent to become a partner/designated partner;
Form 8:- Statement of Account & Solvency (Annual or Interim); and
Form 11:- Annual Return of LLP
|Relief which have been provided under the Act||Reduction in late fees from INR 100/- per day to INR 10/- per day subject to maximum of 5000/-. Fees of form shall be payable as actual.
· No further actions shall be taken, if the LLPs filed all documents till 13th June 2020.
|Period of LLP Settlement Scheme, 2020||From 16th March, 2020 to 13th June, 2020|
Undoubtedly, a great initiative was taken by our government in order to provide relief to L.L.P.s from financial burden and ease of doing business in India. The Scheme will be applicable only on defaulting L.L.P.s and defaulting L.L.P.s are allowed to file the respective forms; in other words, belated documents that were due to be filed up to October 31, 2019. Instead of paying INR 100/- per day, L.L.P.s are required to pay only 10/- per day. The late fees will be in addition to the fees of the forms or documents to be filed and the maximum cap. Is being restricted at INR 5,000/- per document.
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