MCA launches LLP Settlement Scheme, allows condonation of delay in filing compliance docs

New Delhi: The Ministry of Corporate Affairs (MCA) stated in a press communication that it has been observed that due to applicability of additional fee on late filing, which in case of inordinate delay could actually become a financial burden, a large number of Limited Liability Partnerships (LLPs) have remained non-compliant, mainly on account of their inability to pay late fees for the cumulative period of delay.

As part a part of ‘ease of doing business’,  it has been decided to give a one-time relaxation in additional fee to the defaulting LLPs to make good their default by filing pending documents and to serve as a  compliant LLP in future.

Accordingly, 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.

LLPs, that wish to avail themselves of the scheme, may file the pending documents or forms and make good the defaults, to gain immunity from prosecutions for such defaults.

The Scheme shall come into force on the 16 March, and shall remain in force up to 13 June. It would be applicable to a ‘defaulting LLP’ for filing overdue documents, which were due for filing till 31 October 2019, on a payment of a nominal additional fee of Rs 10 per day for the period of delay, in addition to any fee as is payable for filing of such document or return, subject to a maximum amount of Rs 5,000 as additional fee per document.

The Scheme shall apply to the filing of the following documents:

  1. Form 3 – Information with regard to LLP 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).

The Scheme is being introduced in pursuance of the Government’s objective of providing greater ‘Ease of Living’ to the citizens and is expected to provide significant relief and a window of opportunity for LLPs to abide by the Law & conduct business accordingly.

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The ID Staff

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