There are many LLPs who are not running its business activities as they found out after many years of starting their LLPs that many forms were not filed on time and after that, they noticed that there are huge additional fees to be paid and had chosen to start a business in other forms.
This Move is now Aimed to Bring Non-Compliant LLPs to the Legal Fold.
- This scheme would provide a one-time relaxation in an additional fee for the defaulting LLPs.
- LLPs are now given a three-month time period to complete filings which were due, LLPs can now file four forms through which it provides details related to the LLP agreement, partners as well as statement of accounts and annual returns. This scheme will run for 90 days from March 16 to June 30 for the settlement of 4 Forms.
Any “Defaulting LLP” can file its belated documents/specified forms, which were due for filing up to October 31, 2019, in accordance with the provisions under this scheme.
“DEFAULTING LLP”: It means any LLP registered under the Limited Liability Partnership Act, 2008 and it has made a default in filing of documents/forms within the due date as specified under the LLP Act, 2008 and rules under it.
The scheme will apply with filing only with the following Specified Forms:
- Form-3 relates with Information for limited liability partnership agreement and changes if any;
- Form-4 relates with 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 relates with Statement of Account and Solvency
- Form-11 relates with Annual Return of LLP ( Limited Liability Partnership).
LLPs, who wish to avail this scheme, can file the pending forms with ROC and make good the defaults.
LLP Settlement Scheme 2020 will not apply to LLPs which has already made an application in Form 24 to the Registrar, for strike off its name from the register as per provisions of Rule 37(1) of the LLP Rules, 2009.
Likewise, In cases where the forms have not been filed for many years say 5 years, a stakeholder has to pay almost Rs 1.5 lakh penalty (under the LLP Act). This settlement scheme will now allow LLPs to start their business activity and will come back in the fold of the law. Further, they can now clear the default by simply paying a fee of Rs 5,000.
This move will improve compliance, make life easy for the businesses who were suffering, re-initiate business activity and help them to cure problems that they may be facing due to non-filing of returns.