LLPs are considered as a preferred business option for small entrepreneurs as it provides the benefits of Limited Liability on one hand whereas its members has the total elasticity of organizing its own structure, roles and responsibilities as a partnership firm on the basis of an mutually agreed pre-defined agreement.
In recent years there are huge numbers of defaulting LLP’s in India as per MCA database i.e. due to heavy penalty of Rs. 100 per day irrespective of the capital contribution there is standard penalty on each Limited Liability Partnership who has made default in filing therefore it’s a Welcome step for all LLP’s. In order to promote ease of doing business, the Central Government decided to give a Onetime relaxation in additional fees to the defaulting LLPs to make good their default by filing pending documents and to serve as a compliant LLP in the future.
Now we shall understand the same in question and answer.
Q 1. What is the legal provision of LLP SETTLEMENT SCHEME -2020?
Ans. The Central Government in exercise of its power u/s 460 of the Companies Act, 2013 (extended to LLPs vide Gazette Notification No. G.S.R. 59(E) Dated 30TH January, 2020 u/s 67 (2) of the Limited Liability Partnership Act, 2008) 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..
Q 2. What is the effective date of LLP Settlement Scheme, 2020?
Ans. The scheme shall be effective from 16th March 2020 to 13th June 2020.
Q 3. To whom LLP Settlement Scheme, 2020 is applicable?
Ans. 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.
Q 4.What is ‘Defaulting LLP’?
Ans. “Defaulting LLP” means an LLP registered under the Limited Liability Partnership Act, 2008 which has made a default in filing of documents on the due date(s) specified under the LLP Act, 2008.
Q 5.For which forms LLP Settlement Scheme, 2020 is applicable?
Ans. This scheme is applicable only on 4 (four) forms of LLP:
1. Form LLP-3 for LLP Agreement and change therein.
2. Form LLP-4 for Notice of appointment, cessation, change in name/address/designation of designated partner/partner
3. Form LLP-8 for Statement of Account and Solvency
4. Form LLP-11 Annual Return of LLP
Q 6.To whom this scheme is not applicable?
Ans. This scheme shall not be applicable to LLPs which has made an application in Form 24 to the Registrar, for striking off its name.
Q 7.What is the additional fee as per this scheme?
Ans. The additional fees shall be Rs. 10/- per day per form as per this scheme.
Q 8.What is the maximum additional fee as per this scheme?
Ans. The maximum additional fees shall be Rs. 5000/- each form.
Q 9.From which date Defaulting LLP’s can file forms under this scheme?
Ans. The Defaulting LLPs shall avail this scheme w.e.f 16th March 2020 and file all pending forms on or before 13th June 2020.
Q 10.What is the immunity from prosecution in respect of document(s) filed under this scheme?
Ans. The defaulting LLPs which have filed their pending documents till 13th June 2020 shall not be subjected to prosecution by Registrar of Companies (ROC).
Q 11.What will happen on the conclusion of this scheme?
Ans. On the conclusion of this Scheme, the Registrar shall take necessary action against the LLPs which have not filed forms under this scheme and have defaulted in the filing of documents as required under the provisions of the LLP Act, 2008.
Q 12.What are the Advantages to the Defaulting LLPs those took benefit of LLP Settlement Scheme-2020?
Ans. I Monetary benefits as Huge amount of Additional fees is waived.
ii. The defaulting LLPs, which have filed their pending Forms till 13th June, 2020 and made good the default, shall not be subjected to prosecution by Registrar for such defaults.
Conclusion: There is stronger demand for such onetime scheme for defaulting companies. For now it seems LLPs are lucky for time being, however, it also means that LLPs would be the next one in target for government in its effort to clear the mess
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