MCA introduces a One Time Settlement Scheme for filing pending forms of all existing LLP registered by paying a minimal additional fee

December 14, 2020 by Team Instabizfilings

Scheme shall come into force on the 16th of March, 2020 and shall remain into force up to 13th June, 2020. The following forms are covered under the settlement scheme.

1) Form-3 : Information with regard to limited liability partnership agreement and changes, if any, made therein;

2) Form-4 : Notice of appointment, cessation, change in name/ address/ designation of a designated partner or partner and consent to become a partner/ designated partner;

3) Form-8 : Statement of Account & Solvency (Annual or Interim);

4) Form-11 : Annual Return of Limited Liability Partnership (LLP).

It is been observed by the Government that a large number of LLP’s have been defaulting in filing Form (3) viz. LLP Agreement and changes therein and statutory return viz. Form (8)-Statement of Account & Solvency (Annual or Interim) and Form 11-Annual Return of LLP. Due to this records in registry are not updated. Further, the LLP’s and their designated partners are liable for criminal prosecution and said LLP’s cannot be closed till all compliances are completed

Previously, In the event of requisite forms not being filed within prescribed time presently LLPs may file such documents on payment of additional fee for one hundred rupees for every day of such delay under Section 69 of the LLP Act in addition to any fee as is payable for filling of such document or return.

The Central Government has decided to introduce a scheme namely "LLP SETTLEMENT SCHEME, 2020", by allowing a One-Time Condonation of Delay in filing statutorily required documents with the Registrar.

The applicability of the Act is stated as, “Any "defaulting LLP" is permitted to file belated documents, which were due for filing till 31st October, 2019 in accordance with the provisions of this Scheme”.

Under new scheme “The defaulting LLPs may themselves avail of the scheme for filing documents which have not been filed or registered in time on

1) Payment of additional fee Rs 10- per day for delay in addition to any fee as is payable for filing of such document or return or

2) Payment of One Time fee of INR 5,000 per form.

Whichever is lower

For example: -

Form	Period Of Delay	Late Fees Under Old Scheme	Late Fees Under New Scheme	Savings
11(Annual Return)	1 Year	36,500 (365days *100)	3,650 (365days*10)	32,850
11(Annual Return)	2 Years	73,000(730days*100)	5,000	68,000

Immunity: The defaulting LLPs, which have filed their pending documents till 13th June 2020 and made good the default, shall not be subjected to prosecution by Registrar for such defaults.

This Scheme shall not apply to LLPs which has made an application in Form 24 to the Registrar, for striking off its name from the register as per provisions of Rule 37(1) of the LLP Rules, 2009.