LLP Settlement Scheme, 2020

Lets Talk Compliance – LLP Settlement Scheme, 2020 – a posse ad esse!!

As per legal maxim, A POSSE AD ESSE means from possibility to reality, based on various representations Ministry of Corporate Affairs launched “LLP Settlement Scheme, 2020” as modified w.e.f 01st April’2020 to provide Onetime relaxation to the defaulting LLPs for filing pending statutory forms in order to bring the non-compliant into legal fold. The scheme aims to benefit 20-25% of the 1.25 lakhs LLPs Registered in the country as more number of LLPs are non-complaint due to the inability to pay the accumulated additional fees.

 

Availability of the Modified Scheme:

Start Date:           1st April 2020                         End Date:           30th September 2020

( Original Scheme:16th March’2020- 31st March’2020)

 

Eligible LLP to avail the Scheme:

Limited Liability partnership firm (LLP) which defaulted in the submission of following forms till 31st August 2020 ( Original scheme-31st October’2019)

  • LLP Form 3 – Information relating to Initial agreement or changes made therein.
  • LLP Form 4 – Notice relating to appointment/cessation/changes in name & Address of designated partner.
  • LLP Form 5 – Notice for change of name
  • LLP Form 8 – Statement of Accounts and Solvency
  • LLP Form 11 –Annual Return
  • LLP Form 12 – Form for intimating other address for service of documents
  • LLP Form 22 – Notice of intimation of Order of Court/ Tribunal/CLB/ Central Government to the Registrar
  • LLP Form 23- Application for direction to Limited Liability Partnership (LLP) to change its name to the Registrar
  • LLP Form 27- Form for registration of particulars by Foreign Limited Liability Partnership (FLLP)
  • LLP Form 29- Notice of (A) alteration in the certificate of incorporation or registration; (B) alteration in names and addresses of any of the persons authorised to accept service on behalf of a foreign limited liability partnership (FLLP) (C) alteration in the principal place of business in India of FLLP (D) cessation to have a place of business in India
  • LLP Form 31- Application for compounding of an offence under the Act.

The scheme shall not apply to LLPs which has already submitted an application in LLP Form 24 to strike off its name from the register as per Rule 37(1) of LLP Rules, 2009.

 

Key Benefits to LLPs under the Scheme:

  • 6 months window is given to file the defaulted statutory forms (01st April 2020 to 30th September 2020).
  • No Additional fees for belated filing. ( Original Scheme – Rs.10/- as additional fee capped at Rs.5,000/- per form)
  • Immunity from the prosecution for defaults till 30th September’2020 ( Original Scheme – 13th June’2020)

What if when the Scheme not availed?

  • Additional fees would be back to Rs.100 per day after the expiry of the scheme.
  • No upper cap on the accumulated additional fees after the expiry of the scheme.
  • The Registrar shall take action against the Defaulted LLPs which have not availed the scheme and which may attract monetary penalty to designated partners as well.

Reason behind the introduction of this Scheme :

  • If the LLP fails to file the statutory document, it becomes liable for criminal prosecution and cannot be closed down until the completion of compliances in full.
  • Conversion of LLP into Private company can be achieved only if defaulted document are filed with Registrar.
  • Inspection of financial details of LLP can be done only if a defaulted LLP file non-complaint documents with the Registrar.
  • To weed out any dormant companies, if any. To bring the non complaint LLP into legal ambit.

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Contact us at marteking@aparajitha.com for a free Compfie demo.

 

Shivadharini SNS- CAS Team

 

Disclaimer: “The article represents the opinions of the author and the author is solely responsible for the facts, cases, and legal or otherwise reproduced in the article”

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