20 FAQs on Modified LLP Settlement Scheme, 2020
A
large number of representations were received from various quarters for waiver
of fee or condonation of delay and relaxations in additional fee on the ground
of excessive financial burden. It is also noted that a large number of LLPs are
not filing their due statutory documents which are required to be filed with
the prescribed fee
Due
to this, the records available in the electronic registry are not updated and
they are not available to the stakeholders for inspection.
Government
also receivced representations from many stakeholders to provide opportunity to
make pending compliances good. Therefore, Ministry in order to tackle COVID-19
threat and to reduce the compliance burden 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 future.
Hope
all stakeholders will get answer of their query from following FAQs:-
Q1) Analysis
of Modified LLP Settlement Scheme, 2020?
A.1. It is a
Onetime relaxation by waiver of additional fees given to defaulting LLPs to
make good their default by filing pending all forms that are required to be filed under the provisions of LLP Act, 2008 and rules made there under and to serve as a compliant LLP in future.
Q2) What is
the motive of Ministry to launch this Scheme?
A.2. The
Ministry of Corporate Affairs, received many representations from Corporates
and to address the COVID-19 threat and to reduce the compliance burden promote
ease of doing business, has decided to introduce a scheme namely “LLP
Settlement Scheme, 2020”. This Scheme allow One-time condonation of delay in
filing statutorily required documents with the Registrar.
Q3) Does this
scheme launched permanently?
A.3. No, it
is one time relaxation, as part of Government’s constant efforts to promote
ease of doing business it has been decided to give a Onetime relaxation in
additional fees to the defaulting LLPs to make good their default by filing pending all forms, documents and to serve as a compliant LLP in future.
Q4) When does
this Scheme comes into force?
A.4. Earlier,
the Scheme shall come into force on the 16th March, 2020 and shall
remain effective up to 31st March, 2020 (both days inclusive).
But time
period of the revised Scheme is from 1st April, 2020 and shall remain effective
up to 30th September, 2020 (both days inclusive).
Q5) What do
you mean by Defaulting LLPs?
A.5. “Defaulting
LLP” means a 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 and rules made there under.
Q6) What are
belated documents as per the Scheme?
A.6. “Belated
documents” means all forms that are required to be filed under the provisions
of LLP Act, 2008 and rules made there under.
Q7) Is there any
application required to be file with ROC to avail this Scheme?
A.7. No
Q8) What are the
following documents on which such scheme is not applicable?
A.8. Scheme
shall not be apply to the filing of documents except the following:
A.
Further the Original Scheme was applicable only for
four forms viz. Form Nos 3, 4, 8 and 11 whereas the Revised Scheme is
applicable for all forms that are required to be filed under the provisions of
LLP Act, 2008 and rules made there under.
Documents:
i. Form-3- Information with regard to limited
liability partnership agreement and changes, if any, made therein;
ii. 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;
iii. Form-8; Statement of Account & Solvency
(Annual or Interim);
iv. Form-11- Annual Return of Limited Liability
Partnership (LLP).
B.
LLPs which have applied in Form 24 for striking off its name from Register as
per provisions of Rule 37(1) of the LLP Rules, 2009
Q9) If My LLP wants to claim benefits of this Scheme
then what will be the conditions need to be fulfilled?
A.9. Any defaulting LLP is
permitted to file belated documents/forms which were due for filing till August
31, 2020, can avail the benefits under this Scheme.
Q10) Which LLPs are excluded from such Scheme?
A10. This
Scheme shall not be apply to LLPs which have made applications in Form 24 to
the Registrar, for striking off their name from the Register as per Provisions
of Rule 37(1) of LLP Rules, 2009.
Q11) What shall be the manner of payment of fees
and additional fee on filing belated document for seeking immunity under the
Scheme?
A11. Initial Scheme Says,
A.
Under the scheme, for the belated documents, the
LLP shall pay:
• Statutory filing fees as prescribed under the LLP Act and rules
made there under along with
• an additional fee of Rs 10 per day, provided that such payment of
additional fee shall not exceed Rs. 5,000/- per document.
Eg: If there is delay of 750 days, then additional
fee for the form at the rate of Rs. 10 per day works out to Rs. 7,500 > Rs. 5,000 and therefore
additional fee will be Rs. 5,000 for the form.
Thus,
Additional fee of Rs 10 per day is payable per document subject to maximum of
Additional fees not exceeding Rs. 5,000/- per document; whereas
Modified LLP
Settlement Scheme says,
No additional
fees are payable under the Revised Scheme dated 30th March, 2020 vide Proviso
of Point no. (iv) of Para 8A inserted after Point 8 of circular dated 04.03.2020
w.e.f 01.04.2020.
Comment: According to me No additional fees is required to be paid now
but professionals are advised to check first by generating Pay Fee Later
Challan.
Q12) Will my LLP be able to avail benefits of
this scheme as decision to Strike off is approved by the partners?
A12. The scheme is not applicable on the LLPs who had filed Form 24 with the
ROC for striking off their names from the Register. Thus if LLP had just
approved among partners and not filed form with the registrar yet then LLP can
avail benefits of the Scheme.
Q13) Documents
for which period in the past, a defaulting LLP is permitted to file?
A.13. “defaulting LLP”
is permitted to file belated documents, which were due for filing till 31st
August, 2020 in accordance with the provisions of this Scheme.
Q14) On which LLPS, registrar shall take necessary
action under the LLP Act, 2008?
A14. After
30th September, 2020 the registrar shall take necessary
action under the LLP Act, 2008 against the LLPs which have not availed the
Scheme and are in default in filing of documents as required under the
provision.
Q15) Is there
any immunity from prosecution in respect of document(s) filed under the scheme?
A.15. Yes, the
defaulting LLPs, which have filed their pending documents till 30th September,
2020 and made good the default, shall not be subjected to prosecution by the
Registrar for defaults in filing of forms and documents by the due date.
Q16) From when my LLP will be able to avail benefits of such Scheme?
A.16. initial scheme leads to availment of benefits from 16th March, 2020 to 31st March, 2020 (both inclusive) but Modified Scheme launched on 30th March, 2020 leads to availment of benefits from 1st April, 2020 to 30th September, 2020 (both inclusive)
Q17) Which LLPs are not subject to Prosecution in
respect of document(s) filed with registrar?
A.17. The
defaulting LLPs which have filed their belated documents till 30th
September, 2020 and made the good default, shall not be subject to Prosecution.
Q18) If my LLP has filed
Form 24 with the Registrar will it be able to avail benefits of such Scheme?
A18.
It is given that if any LLP had filed an application Form 24 for Striking Off
its name from the Register of Registrar of Companies then it will not be able
to avail such benefits.
Q19) Why government launch
such Scheme?
A19.)
To promote Ease of Doing Business
Q20) What
action Registrar can take on the defaulting LLPs which have not availed this
Scheme after conclusion of the same?
A.20. On the
conclusion of the Scheme after 30th September, 2020, the Registrar
shall take necessary action under the LLP Act, 2008 against the LLPs which have
not availed this Scheme and are in default in filing of documents as required
under the provisions of LLP Act, 2008 in a timely manner. The defaulting LLPs
may be subjected to prosecution by Registrar for such defaults.
CONCLUSION: It is Golden
Opportunity for the Limited Liability Partnerships concern to make their compliances
good and contribute towards welfare of the country and make it easy for
Ministry also to proceed further smoothly.
DISCLAIMER: The article is based on the
relevant provisions and as per the information existing at the time of the
preparation. in no event i shall be liable for any direct and indirect result
from this article. this is only a knowledge sharing initiative.
THE
AUTHOR – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can
be reached at contacthhpro@gmail.com
or 9910248911.
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