Government has taken yet another step to promote ease of doing business. On March 4, 2020, Government issued the “LLP Settlement Scheme 2020” and subsequently amended the scheme on March 30, 2020.
It has been over a decade since Limited Liability Partnership (LLP) Act came into force. The LLP is viewed as an alternative corporate structure that provides the benefits of limited liability and allows its members the flexibility as a partnership based on a mutually arrived agreement. Owing to flexibility in its structure and operation, the LLP often become the preferred option for small enterprises.
However, many LLPs have not been regular in their statutory compliance.
This settlement scheme is for all those LLPs which have not filed forms in the past. This ‘one-time’ scheme allows such LLPs to file the forms with reduced penalties. All those LLPs who want to make good the default in filing forms can avail this scheme.
Read on.
#1 – To which LLPs does the scheme apply?
Only the “defaulting LLP” can take advantage of this scheme. “Defaulting LLP” means that LLP which has not file forms and documents which were required to be filed within the due dates as per the LLP Act, 2008 and the rules.
Any LLP which wants to apply for ‘strike-off’ of its name has to file all the pending documents with the MCA before the application for strike-off has been made.
Hence this scheme can be a boon for those LLPs who want to do not want any action from the regulator and do the business in compliant manner as well as for those LLPs who want to strike off their names.
#2 – Is there a list of pending forms that can be filed under this scheme?
The scheme is applicable to all forms to be filed by any LLP which were due for filing till August 31, 2020.
#3- When does the scheme not apply?
This scheme is not applicable to LLPs who have already applied for strike-off of the name from the register.
#4 – Is there a validity of the scheme?
Yes, the scheme is valid from April 1, 2020 to September 30, 2020.
#5 – What are the fees for filing the forms?
The defaulting LLPs have to pay the normal fee applicable for filing pending forms. No additional fee / penalty will be charged for filing such forms.
#6 – Will there be any action against the defaulting LLPs?
No action will be taken by the Registrar against the LLPs, which have filed their pending documents till September 30, 2020 and made good the default.
However, after the closure of the scheme the Registrar will take necessary action under the LLPs, which have not availed this Scheme and are in default in filing of documents.
This scheme provides one-time relaxation to LLPs for filing pending forms with the Registrar without payment of additional fees.
So, use this opportunity to make your LLP fully compliant. File the pending forms and documents to avoid any prosecution by the Registrar.
If you need assistance in filing forms, you can write to me at kruti@cskruti.com