Llp Settlement Scheme 2020

The Ministry of Corporate Affairs, Government of India has introduced the LLP Settlement Scheme 2020. The scheme is set to give defaulting LLPs a one-time relaxation in paying the condonation fees for the delayed filing of documents. The scheme will come into force from 16th of March 2020 and will be in force up till the 13th of June 2020. This article deals with the details of the Llp Settlement Scheme 2020.

Reasons for the Scheme

The initiation of the LLP settlement scheme is for certain reasons and following are the reasons:

Many of the LLP have been at default for filing the documents. Such LLP was charged with a fine amount of Rs.100 per day along with the additional fee for delayed filing of the document
The pleas from a large number of LLP representations regarding the condonation of delay, waiver of fees and also the additional LLP
The LLP and their designated partners become liable for criminal prosecution if the LLP fails to file the document. For such defaults, the LLP cannot close until the completion of all its compliances

Applicability

A defaulting LLP which is registered under the Limited Liability Partnership Act, 2008 is applicable for the scheme. But such an LLP is applicable only if it has made any default in filing the documents. The filing of the documents due upto 31st of October, 2019 is eligible.

Manner of Payment of Fees

The LLP which is at default for not filing their documents is subject to pay a certain amount as fine. While filing the documents, the

LLP has to pay Rs.10 for each delayed date upto Rs.5,000 per document.

Immunity from Prosecution

There is a prosecution by the

Registrar if any of default LLP has not filed the documents. LLPs which files documents within 13th of June 2020 under the scheme will escape prosecution.

Filing of Documents

The scheme is applicable only for filing the following delayed documents from the LLP Act:

Form-3 which relates to the Information regarding the LLP agreement and its changes.
Form-4 which relates to the notice of cessation, appointment, changes in name, address, consent to become a partner or designated partner and designation of a partner or designated partner.
Form-8 which relates to the Statement of Account and Solvency either annual or interim.
Form-11 which relates to the filing of annual return of the LLP.

Non-Applicability

If an LLP has made an application for strike-off to the Registrar, then it is not applicable under this scheme. The notification for the Llp Settlement Scheme 2020 is below for reference:

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Frequently Asked Questions

Common questions about LLP Settlement Scheme 2020: Filing and Compliance.

The LLP Settlement Scheme 2020 is a one-time opportunity introduced by the Ministry of Corporate Affairs, Government of India, for defaulting Limited Liability Partnerships (LLPs) to pay reduced condonation fees for delayed filing of documents. It aims to provide relaxation and avoid prosecution for non-compliant LLPs.

The scheme was introduced for several reasons, including: (a) many LLPs were defaulting on filing documents and incurring heavy fines, (b) there were pleas from LLP representations for condonation of delays and fee waivers, and (c) defaulting LLPs and their partners were liable for criminal prosecution if they failed to file documents.

Any defaulting LLP registered under the Limited Liability Partnership Act, 2008, is eligible for the scheme, provided it has defaulted in filing documents due up to October 31, 2019.

The LLP Settlement Scheme 2020 came into force on March 16, 2020, and will remain in effect until June 13, 2020.

Under the scheme, defaulting LLPs have to pay a reduced fee of Rs. 10 for each day of delay, subject to a maximum of Rs. 5,000 per document.

The scheme covers delayed filing of Form-3 (LLP agreement and changes), Form-4 (partner details), Form-8 (statement of accounts and solvency), and Form-11 (annual return).

LLPs that file delayed documents under the scheme will be granted immunity from prosecution by the Registrar for non-filing of documents.

No, LLPs that have already applied for strike-off to the Registrar are not eligible for the LLP Settlement Scheme 2020.

Yes, LLPs can file delayed documents even after the scheme ends on June 13, 2020. However, they will have to pay the full condonation fees and may face prosecution for non-filing.

Yes, the deadline for filing delayed documents under the LLP Settlement Scheme 2020 is June 13, 2020. LLPs must file their documents and pay the reduced fees by this date to avail the benefits of the scheme.