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The Ministry of Corporate Affairs on March 4, 2020, announced a remission scheme called LLP Settlement Scheme, 2020 for Limited Liability Partnerships (LLPs). This scheme will offer a one-time settlement scheme for non-compliant LLPs by giving them one more year to submit their pending documents and to get immunity from prosecution for defaults. In basic terms, it means that the scheme is providing a three-month window from March 16, 2020, to June 13, 2020, to Limited Liability Partnerships (LLP) for completing overdue or delayed filings of the four forms which were due for filing till October 31, 2019. Also, the additional fee on these forms is reduced to Rs. 10 from Rs. 100 per day of delay with an upper cap of Rs. 5,000 per form.
Table of Contents
The reasons for the introduction of LLP Settlement Scheme, 2020 are as follows:
The Ministry of Corporate
Affairs (MCA), taking into consideration the non- compliance by the LLP’s and
for regularization and promotion of good governance policy has come up with the
The LLP scheme, 2020 is
applicable only for filing the following delayed documents specified under the
Limited Liability Partnership Act, 2020:
The following are the advantages of LLP Settlement Scheme, 2020:
immunity from prosecution with respect to documents filed under the LLP Settlement
scheme, 2020. The defaulting LLPs, filing their pending documents till June 13,
2020, and who have failed to pay the fees, shall not be subjected to
prosecution by Registrar of Companies (ROC) for such defaults.
In case the defaulting LLP does not take the benefit
of LLP Settlement Scheme, 2020 then they will have to face the following
This move of the Government comes in the wake of several LLPs making default in filing of statutory documents and their inability to correct the situation owing to the financial burden arising from the inordinate delays in statutory compliance. Due to the inability to pay late fees, a considerable number of LLP’s have remained non- compliant for a cumulative period of delay. The scheme is introduced as a Government’s objective of providing greater ease of living to the citizens of the country. It is expected that this scheme will provide significant relief and scope of opportunity for LLPs to abide by the law and conduct business accordingly.
Also, Read: Compounding of Offence Under LLP Act.
Please find the notification in the given link:
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