LLP Settlement Scheme 2020 is a one-time relaxation provided to LLP’s which have defaulted in filing the statutory documents within the required due dates. The LLP’s which opt for this scheme shall not be required to pay additional fees. This scheme has been implemented by the Central Government in exercise of its powers under Section 460 of the Companies Act 2013.
1. Purpose of the Scheme
- To facilitate ease of doing business.
- A large number of LLP’s have defaulted leading to the electronic registry not being updated. The stakeholders are at a disadvantage as the records are not reflected for inspection.
- To provide an opportunity to the LLP to make a fresh start as a fully compliant entity.
- To reduce the financial burden imposed on the LLP’s, which have a long-standing default.
- To enable the inactive LLP’s to close since the filing of certain forms is a prerequisite before the closure of said LLP.
- To take measures to combat the threat imposed by COVID-19 and to reduce the burden of compliance.
2. Applicability of the Scheme
It will apply to all defaulting LLP’s except to those LLP’s which have filed Form 24 to the Registrar for striking off their name from the register pursuant to Rule 37(1) of the LLP Rules, 2009.
3. Eligible Forms To Be Filed
All forms that the LLP is required to file with MCA 21 under the provisions of the LLP Act 2008 and the LLP Rules 2009. Forms which were due till 31 August 2020 shall be allowed to be filed.
4. The Time Period of the Scheme
Effective from 1 April 2020 to 30 September 2020 (both days inclusive) (revised from the original period commencing on 16 March 2020 till 13 June 2020 as per General Circular No 13/2020 dated 30/03/2020).
5. Impact of the Scheme
– Immunity from prosecution shall be provided to the LLP as well as the defaulting partners, if the documents are filed within the said period, i.e. by 30 September 2020.
– If the defaulting LLP’S fail to utilize the scheme, the registrar shall proceed against the LLP, and the LLP may also be subject to prosecution. Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.