MCA INTRODUCES LLP SETTLEMENT SCHEME 2020
The Ministry of Corporate Affairs (MCA) vide General Circular 6/2020 dated March 04, 2020 notified the LLP Settlement Scheme, 2020 (LLPSS-2020), which was subsequently modified via General Circular 13/2020 dated March 30, 2020. The LLPSS-2020 allows one-time condonation of delay to the defaulting Limited Liability Partnerships (LLPs), to complete their pending compliances, without payment of any additional fees, during the moratorium period. The highlights of the LLPSS-2020 are as under:
(a) Applicability – Any defaulting LLP which has made a default in filing of documents on the due date(s) specified under the Limited Liability Partnership Act, 2008 (LLP Act, 2008) and rules made thereunder, is permitted to file belated documents, which are due for filing till August 31, 2020 in accordance with the LLPSS-2020.
(b) Moratorium Period – The moratorium period under the LLPSS-2020 starts on April 01, 2020 and ends on September 30, 2020.
(c) Immunity from prosecution and levy of additional fine – The LLPSS-2020 provides that the defaulting LLPs which will file the belated documents during the moratorium period and make good the default, will not be subjected to prosecution by the Registrar for such defaults and would also be exempted from the payment of the additional fees.
(d) Forms covered under LLPSS-2020 – The following Forms are covered under the scope of the LLPSS-2020:
(i) Form-3: Information with regard to limited liability partnership agreement and changes, if any, made therein;
(ii) 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;
(iii) Form-5: Notice for change of name;
(iv) Form-8: Statement of Account & Solvency (Annual or Interim);
(v) Form-11: Annual Return of Limited Liability Partnership (LLP);
(vi) Form-12: Form for intimating other address for service of documents;
(vii) Form-15: Notice for change of place of registered office;
(viii) Form-22: Notice of intimation of Order of Court/ Tribunal/CLB/ Central Government to the Registrar;
(ix) Form-23: Application for direction to Limited Liability Partnership (LLP) to change its name to the Registrar;
(x) Form-29: Notice of (A) alteration in the certificate of incorporation or registration; (B) alteration in names and addresses of any of the persons authorized to accept service on behalf of a foreign limited liability partnership (FLLP) (C) alteration in the principal place of business in India of FLLP (D) cessation to have a place of business in India; and
(xi) Form-31: Application for compounding of an offence.
(e) Form not covered under LLPSS-2020 – The MCA has clarified that the LLPSS-2020 will not apply to the LLPs which has made an application in Form 24 to the Registrar, for striking off its name from the register in accordance with the provisions of the LLP Act, 2008 and rules made thereunder.
(f) Action against defaulting LLPs upon conclusion of LLPSS-2020 – The MCA has further clarified that upon closure of LLPSS-2020, the Registrar will take necessary action under the LLP Act, 2008 against the LLPs which have not availed the LLPSS-2020 and are in default in filing of documents in a timely manner.
The launch of LLPSS-2020 is a key initiative of Indian Government during COVID-19 outbreak that aims to promote ease of doing business in India as it will reduce the compliance burden of a large number of defaulting LLPs and will also provide them with an opportunity to make a fresh start as fully compliant entities.