The Corporate Laws & Corporate Governance Committee of ICAI has issued a clarification on LLP Settlement Scheme 2020 which was announced by the Ministry of Corporate Affairs.
The Ministry of Corporate Affairs, as part of Government’s constant efforts to promote ease of doing business, 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.
The scheme is not permanent. 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 certain pending documents and to serve as a compliant LLP in future.
The time period of the Scheme shall come from 16th March, 2020 and shall remain effective up to 13th June, 2020 (both days inclusive).
The FAQs issued by ICAI said that, The Scheme shall be applicable only on filing of Form-3- Information with regard to the limited liability partnership agreement and changes, 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, Form-S; Statement of Account & Solvency (Annual or Interim) and iv. Form-11- Annual Return of Limited Liability Partnership (LLP).
The Scheme is not applicable to any form other than Form No. 3, Form No. 4, Form No. 8 and Form No. 11 and this Scheme shall not apply to LLPs which have made an application in Form 24 to the Registrar, for striking off its name from the register as per provisions of Rule 37(1) of the LLP Rules, 2009.
The LLP is not required to file an application to the Registrar to avail the Scheme. The defaulting LLPs may themselves avail of the scheme for filing documents which have not been filed or registered in time on payment of additional fee and statutory fee.
The “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 and rules made thereunder. The “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.
There is immunity from prosecution in respect of document(s) filed under the scheme, the defaulting LLPs, which have filed their pending documents till 13th June 2020 and made good the default, shall not be subjected to prosecution by Registrar for such defaults.
Under the scheme, the manner of payment of fees and the additional fee for the belated documents, the LLP shall pay Statutory filing fees as prescribed under the LLP Act and rules 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.
The Additional fee of Rs 10 per day is payable per document and not in aggregate. Thus, if there is a delay of 300 days for one form and 330 days for another form, then for the form where the delay is 300 days, an additional fee will be Rs. 3,000 and for another form where the delay is for 330 days, an additional fee will be Rs. 3,300.
Cap on the additional fee of Rs 5,000 is applicable per document and not in aggregate. Thus, if there is a delay of 900 days, then an additional fee for the form at the rate of Rs. 10 per day works out to Rs. 9,000 which is more than Rs. 5,000 and therefore additional fee will be Rs. 5,000 for the form.
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.
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