In continuation of the Ministry’s General Circular No. 06/2020 dated 4th march 2020, it has brought specific modification with the existing LLP Settlement Scheme, 2020, with Circular No. 13/2020 dated March 30, 2020, which will be implemented by the Ministry with effect from April 1, 2020.
What is the Purpose of this Scheme?
- To support Limited Liability Partnerships (LLPs) registered in India and also to focus upon taking necessary measures to address the COVID-19 threat and to reduce the compliance burden.
- The pandemic of COVID-19 has created threat to the world economy. In order to boost the economy and provide relief to corporates, the Government has introduced this scheme.
- To facilitate the LLP’s registered in India to make a fresh start.
- One time opportunity for the defaulting LLP’s and enable to file belated returns with normal ROC fees applicable.
Comparative Analysis of Modified LLP Settlement Scheme, 2020 and LLP Settlement Scheme, 2020:
Let’s have a look for the Comparative analysis for LLP settlement Scheme and, 2020 and modified LLP Settlement Scheme, 2020:
| S. No | Particulars | LLP Modified Settlement, 2020 | LLP Settlement Scheme, 2020 |
| 1. | Circular No | 12/2020 dated March 30, 2020 | 06/2020 dated March 4, 2020 |
| 2. | Time Period for the Scheme | April 1, 2020, to September 30, 2020 | March 16, 2020, to June 13, 2020 |
| 3. | Period of days | 6 months | 90 days |
| 4. | Applicability | Any Defaulting LLPs can file belated documents/specified forms, which were due for filing up to August 31, 2020, by the provisions under this scheme | Any Defaulting LLPs can file belated documents/specified forms, which were due for filing up to October 31, 2019, by the provisions under this Scheme |
| 5. | Advantages | Such LLPs need to pay only normal fees, as applicable. | Such LLPs need to pay normal fees with additional fees. |
| 6 | Additional Fees | No additional fees payable, pay only normal fees. | Normal fees, and additionally Rs fee payable 10/- per day of delay, subject with Maximum of Rs. 5000/- per document. |
| 7. | Scheme not applicable | Modified LLP, Scheme is not applicable for the LLPs, which has already made an application in Form 24 to the Registrar, for strike off its name from the register as per the provisions with Rule 37(1) of the LLP Rules, 2009. | This scheme is not applicable for the LLPs, which has already made an application in Form 24 to the Registrar, for strike off its name from the register as per the provisions with Rule 37(1) of the LLP Rules, 2009. |
| 8 | Applicable Forms which can be filed under this scheme | Any form, which is required to be file under the LLP Act, 2008 with the Ministry of Corporate Affairs (MCA 21), and Rules made thereunder. | The scheme was applicable with filing only with the following Specified Forms: Form-3 which relates with Information for limited liability partnership agreement and changes if any; Form-4 which relates with Notice of appointment, cessation of partner/designated partner, change in name/address/designation for a designated partner or partner and for consent to become a partner/designated partner; Form-8 which relates with Statement of Account and Solvency Form-11 which relates with Annual Return of LLP ( Limited Liability Partnership) *Note- No other forms can be filed under this scheme. |
Below are some Definitions which should be taken on a note with this regards;
- Defaulting LLP: It means LLP registered under the Limited Liability Partnership Act, 2008 which has made default in filing of documents within due date(s) specified under the LLP Act, 2008 and rules made thereunder;
- Belated Documents: It means all the documents or forms which are required to be filed under MCA-21 under the provisions of the Limited Liability Act, 2008[1] and rules made there under;
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Manner of Payment of fees on the filing of belated documents for seeking immunity under this scheme:
The Defaulting LLPs may themselves avail this Scheme for Filing of Documents with the Registrar which were not filed on time, and fees will be payable as applicable
No additional fees shall be enforceable under this scheme.
Immunity from prosecution with respect of Documents filed under this scheme:
The Defaulting LLPs which have submitted belated documents/forms till September 30, 2020, as specified under this scheme and have made good their defaults, such LLPs will not be subjected to prosecution by the Registrar for such defaults.
What are the Consequences if LLPs don’t avail Modified – LLP Settlement Scheme, 2020?
If LLPs don’t avail of this scheme, then the Registrar will issue directions to take strict actions against the LLPs who did not file their due forms till September 30, 2020. The consequences may be:
- The normal fee would be payable on the forms;
- An additional fee of Rs. 100 per day of default will be applicable;
- Action for Strike Off by the Registrar will be given;
- Prosecution for the Partners & Designated Partners etc.
Take Away
Modified LLP Settlement Scheme will be one-time relaxation for the defaulting LLPs so that they can rectify their mistake by availing such scheme. It will provide a big relief for such LLPs who have not filed forms with MCA within due dates, which incurred heavy penalties and were about to wound up. After availing of this scheme, they can re-start their business. Also, DIN holders marked was deactivated due to non-filing of DIR-3 KYC or DIR-3 KYC web form, can file such form without any late fees of Rs. 5000/-. This scheme will also save from heavy penalties by filing Form DIR-3 KYC.
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