Have you availed the LLP settlement scheme? If not, then hurry, as the deadline to avail the same is fast approaching! In March, 2020, the government announced the LLP settlement which is a one-time relaxation given by the government to LLPs which had defaulted in filing their statutory documents. If you have not been able to file documents such as notice of Appointment of a new partner, information with regards to LLP Agreement, and other Annual filing documents such as Statement of Account & Solvency and Annual Returns, this scheme is for you. The deadline to avail this Scheme is December 31, 2020.
Why should I avail of the LLP Settlement Scheme?
You should avail the LLP Settlement Scheme, if you are a ‘Defaulting LLP’. A ‘Defaulting LLP’ means a LLP registered under the Limited Liability Partnership Act, 2008 which has made a default in filing of statutory documents by the specified due dates. Typically, if you default in filing these statutory documents, the following consequences may follow:
Due to these omissions of the LLPs, the electronic registry which maintains the records of these things is not updated and it is not available to the stakeholders for their perusal.
Furthermore, Criminal Prosecution could be initiated against the LLPs and their designated partners due to not filing these mandatory documents on time.
LLPs cannot be closed till all compliances are completed.
Hence, if you have defaulted in filing your statutory documents, go ahead and avail of the LLP Settlement Scheme.
Compliances Covered under the LLP Settlement Scheme
The Scheme of 2020 applies to all the forms that the LLP is required to file under MCA 21 according to the provisions of the LLP Act, 2008 and the LLP rules 2009.
Form 3: Information with regard to limited liability partnership agreement and changes that are made in it if any.
Form 4: This form includes information regarding the changes such as Notice of appointment, cessation, change in name, address, designation of a designated partner or partner and consent to become a partner or designated partner.
LLP Form 8: This form contains the information about Statement of Account & Solvency either on Annual or Interim basis.
LLP Form 11: Annual Return of Limited Liability Partnership (LLP).
What are the Benefits of Availing the LLP Settlement Scheme?
Availing the LLP Settlement Scheme would give you the following benefits:
No additional fees would be levied on any return filed under the revised scheme.
You will be permitted to file belated documents which were due for filing on any given dates.
You will be granted with the Immunity Certificate.
Registrar of Companies shall withdraw any pending prosecution regarding such forms and proceedings of adjudication of penalties.
The relaxations provided are not only with regards to the penalty but also saves you from any prosecution and proceedings for late submissions. Prior to this scheme, the designated partners were subjected to criminal prosecution in case of a default in filling of financials. Additionally, the registrar of companies has been instructed to suspend the pending proceedings under section 454 of the Companies Act, 2013. As a result, the companies coming under the ambit of the scheme would not have to pay the extra penalty fee. This one-time relaxation has given an opportunity to defaulting LLPs to clear their dues and be fully compliant.