Government To Bring Settlement Scheme For Limited Liability Partnerships
The government will come out with a one-time settlement scheme for Limited Liability Partnerships that will provide more time to submit their pending documents as well as immunity from prosecution for defaults.
The LLP settlement Scheme, 2020 -- to be in force from March 16 to June 13 -- would permit a "one-time condonation of delay in filing statutorily required documents" with the Registrar of Companies.
"LLPs, that wish to avail themselves of the scheme, may file the pending documents/ forms and make good the defaults, to gain immunity from prosecutions for such defaults," the corporate affairs ministry said in a release on Wednesday.
LLPs are governed by the LLP Act, which is implemented by the ministry. According to the release, it has been observed that due to applicability of additional fee on late filings, which in case of inordinate delay could actually become a financial burden, a large number of LLPs have remained non-compliant. This is mainly due to their inability to pay late fees for the cumulative period of delay.
There would be a one-time relaxation in an additional fee for the defaulting LLPs to make good their default by filing pending documents.
The scheme would permit LLPs to submit their filings that were due till Oct. 31, 2019. The LLP concerned has to pay a nominal additional fee of Rs 10 per day for the period of delay as well as any fee that is to be paid for submitting a document. The additional fee per document would be capped at Rs 5,000.
As per the release, the scheme would be applicable for submission for four types of forms -- 3, 4, 8 and 11 -- by the LLPs.
Form-3 pertains to information about LLP agreement and changes while Form-4 relates to notice of appointment, cessation, change in name/ address/ designation of a designated partner or partner. Form-8 is for statement of account and solvency (annual or interim), and Form-11 pertains to annual return of an LLP.
"The scheme is being introduced in pursuance of the government's objective of providing greater ease of living to the citizens of the country and is expected to provide a significant relief and a window of opportunity for LLPs to abide by the law and conduct business accordingly," the release said.