INTRODUCTION
It has been observed that due to applicability of additional fee on late filing, which in case of inordinate delay could actually become a financial burden, a large number of Limited Liability Partnerships (LLPs) have remained non-compliant, mainly on account of their inability to pay late fees for the cumulative period of delay.
As part of Government’s constant efforts to promote ease of doing business it has been decided to give a One-time relaxation in additional fee to the defaulting LLPs to make good their default by filing pending documents and to serve as a compliant LLP in future.
Accordingly, the Central Government vide General Circular No 06/2020 dated 4th March, 2020 introduced a scheme namely LLP Settlement Scheme, 2020 (“The Scheme”) by allowing a One-time condonation of delay in filing statutorily required documents with the Ministry of Corporate Affairs.
EFFECTIVE DATE
The Scheme shall come into force on the 16th March, 2020 and shall remain in force up to 13th June, 2020 (both days inclusive).
APPLICABILITY
It would be applicable to a “defaulting LLP” for filing overdue documents, which were due for filing till 31st October, 2019 on a payment of a nominal additional fee of Rs 10/- per day for the period of delay, in addition to any fee as is payable for filing of such document or return, subject to a maximum amount of Rs. 5,000/- as additional fee per document.
The Scheme shall apply to the filing of the following documents:
- 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).
NON APPLICABILITY
The Scheme shall not apply on such LLP which has made application for strike off.
BENEFITS
- The Scheme gives opportunity to LLP to prevent from Prosecution by Registrar for such default.
- Minimize the Addition fees upto maximum Rs. 5000.
FREQUENTLY ASKED QUESTIONS
- Whether this Scheme is permanent?
No. It is one time relaxation, 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 certain pending documents.
- What is defaulting LLP as per the Scheme?
“Defaulting LLP” means a LLP registered under the Limited Liability Partnership Act, 2008 which has made a default in filing of documents on the due date(s) specified under the LLP Act, 2008 and rules made there under.
- Whether an LLP is required to file an application to the Registrar to avail the Scheme?
No, 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 and statutory fee.
- Whether additional fee of Rs. 10 per day is for all forms in aggregate or individually?
Additional fee of Rs 10 per day is payable per document and not in aggregate. Thus, if there is there is delay of 300 days for one form and 330 days for another form, then for the form where delay is 200 days, additional fee will be Rs. 2,000 and for another form where delay is for 440 days, additional fee will be Rs. 4,400.
- Whether cap of Rs. 5,000/- on additional fee is for all forms in aggregate or individually?
Cap on additional fee of Rs 5,000 is applicable per document and not in aggregate. Thus, if there is there is delay of 900 days, then additional fee for the form at the rate of Rs. 10 per day works out to Rs. 9,000 which is more than Rs. 5,000 and therefore additional fee will be Rs. 5,000 for the form.
- Is there any immunity from prosecution in respect of document(s) filed under the scheme?
Yes, 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.
- What action Registrar can take on the defaulting LLPs which have not availed this Scheme after conclusion of the same?
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. The defaulting LLPs may be subjected to prosecution by Registrar for such defaults.
