As discussed for the reason of non-filing of the required returns by defaulting LLP several LLP has remained non-compliant resulting in the following adverse consequences, which is precisely why the LLP Settlement Scheme 2020 has been announced.
ROC Records Updation:
The ROC records of the LLP are open for inspection by the stakeholders on payment of the prescribed fee, however as the LLP did not file requisite forms the records of the LLP are not updated and hence not available for inspection by the stakeholders.
Avoid Criminal Prosecution of Partners
Due to non-filing of LLP Form to the ROC the designated partners are liable for criminal prosecution. Under this scheme the designated partners of defaulting partners are granted immunity from prosecution.
So that the inactive LLP is able to Close
As several LLP did not file Form 3 and annual returns in form 11 and form 8, the LLP can not be closed as it is a prerequisite before the LLP goes for liquidation or winding up. Under this scheme the expectation from the inactive LLP is to file all the pending forms/returns and then close if required.
Process For LLP Settlement Scheme 2020
The LLP Settlement Scheme 2020, gives a one time opportunity to all the defaulting LLP to file their pending returns, documents etc. to ROC without any additional fee or penalty. The first step to avail the LLP Settlement Scheme (LLPSS) is to do a due diligence of your LLP and make a list of pending returns to the ROC. You can also file the LLP agreement in LLP Form 3 if you missed it at the time of LLP incorporation. The New LLP Settlement Scheme is effective from 1st April 2020 and shall continue until 31st December 2020.Read more Chat with us
Effective Date (1st April to 30 Sep 2020)
The Revised LLP Settlement Scheme 2020 is effective from 1st April 2020 and shall be open for filing of all the old and pending forms upto 30th September 2020. The original scheme has been revised to extend the date and benefits.
Applicability (All Pending Forms and Returns)
The Scheme is applicable to all defaulting LLP for the forms which were due for filing until 31st August 2020. In simple words, it is available for filing Form 11 and Form 8 for the financial years up to 2018-19, however for the LLP Form 3 and 4 all forms which are due until 31 August 2020 can be filed under this scheme.
Benefit (100% Late Fee Waiver)
The most important benefit of the LLP Settlement Scheme 2020 is that it gives you complete waiver of additional fee and there is no penalty on filing of any LLP Return whatsoever. This scheme is a replica to the Companies Fresh Start Scheme 2020 for the Limited Liability Partnerships.
Immunity from Prosecution
The defaulter LLP and its partners are liable for criminal prosecution for non-filing of required forms and returns under the LLP Act, However, if the defaulting LLP files all the pending returns before 30th September 2020, they shall be entitled to immunity from prosecution in respect of the documents or forms they file under this scheme.
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Step - 1: Due Diligence Check - 1-2 Days
Through the process of due diligence, you shall discover all the defaults of the past and can take remedial steps to correct it. The LLP Settlement Scheme 2020 gives a one time opportunity to come clean and start afresh your LLP. We have a Complimentary Service to do Due Diligence check Limited to ROC Filing. Please contact us
Step - 2: File All Pending Returns - Within one week
Once you know what are the forms, documents, statements, and returns, which have to be submitted to ROC for your LLP. Get it done from Setindiabiz. We have a dedicated team of Company Secretaries waiting to help you to file all your pending returns on a reasonable professional fee. Please note that 31st December is the last date to file pending forms under LLP Settlement Scheme - 2020
Step - 3: Wait for approval of the ROC - Instantly to 10 Days
After you have filed all your pending forms, wait for its approval by the ROC. The annual returns like Form 11 and Form 8, etc get approved instantly based on the professional attestation. However, forms like Form 3 and Form 4 may take some time in getting approved.
Step - 6: Move ahead in Life
Well, since now all pending compliance of the LLP is over, relax and take appropriate steps to do the complete due diligence of your business in future. You may do the following
- Keep doing business and always remain compliant
- Close your business by filing Form 24
Frequently Asked Questions
What is the purpose or intent of LLP Settlement Scheme 2020?
The purpose of the LLP Settlement Scheme is to reduce the compliance burden on small businesses and give an opportunity to all the LLP which has defaulted in the past with respect to any ROC Filing. This is an incredible amnesty scheme by MCA which allows a defaulting/inactive LLP to file all pending compliance related returns and documents in the MCA-21 portal without any additional fee and penalty.
What is the benefit of the LLP Settlement Scheme 2020?
There are two major advantages of this scheme, first it allows a window of opportunity to file all pending returns like Old Form 3, Form 4, Form 11, Form 8 i.e. comply with the legal provisions of the Limited Liability Partnership Act, 2008. Secondly there is complete waiver of the additional fee, which is really a very big benefit to the small businesses. Apart from the two benefits the LLP and its designated partners are granted immunity from prosecution.
What is the timeline of the LLP Settlement Scheme 2020?
The timeline of the scheme gives a window of nine month from 1st April to 31st December 2020, within which the LLP should file all its pending returns.
What shall be the fee payable on filing the pending e-forms ?
The government fee for filing all pending LLP Forms under the LLP Settlement Scheme has been completely waived off and only the normal filing fee is payable, which is very reasonable.
What LLP is eligible for availing this Scheme?
The LLP Settlement Scheme permits all defaulting LLPs toi file belated documents and forms which were due to be until 31st August 2020. In other words all llp which has defaulted in filing any of the return is eligible
What kind of LLPs can avail the benefits of this scheme?
This scheme is available to all active LLP (which has not been closed already or for which form 24 is already filed for closure), irrespective of its size and type. Any LLP which has ever defaulted in filing a document, statement or return to the registrar of companies can take benefits of this scheme.
Can the designated partners who did not filed DIN KYC can file the KYC under this Scheme?
As per the MCA, all the DIN which has been marked as Deactivated due to non filing of the DIR-3 KYC has been marked as Active and the directors/designated partners can now first file their DIR-3KYC without any fee and then they may file any belated return of the company
Is it necessary to file all pending returns to claim immunity under this Scheme?
Yes, the immunity is available only when the LLP files all the pending returns. Hence this MCA Amnesty scheme known as LLP Settlement Scheme is good only when all the pending forms have been filed.
What are the e-forms which shall be given benefit of no late fee under this Scheme?
Under the LLP Settlement Scheme 2020 (ROC Amnesty Scheme for LLP) all belated forms/returns can be filed. There is no form which has been left out.
Whether this Scheme will provide immunity to the defaults in filing the annual return?
Yes, The instant MCA Amnesty Scheme known as LLP Settlement Scheme 2020 has one of the main purposes to encourage LLPs to file all pending returns including the annual returns like Form 11 and Form 8. It can be said without any doubt that this scheme covers the annual returns of the LLP very well.
Give me an example of the benefit of this scheme if I file annual returns of the past two years?
To illustrate the benefits of the LLP Settlement Scheme, let's take an example. Suppose a LLP “ABC Technologies LLP” has not filed form 11 and form 8 for the past two financial years i.e 2017-18 & 2018-19, then the following shall be the cost saving in the new scheme. The below calculation is as on 31st March 2020.
|Sl. No||Form Name||Delay (Days)||Normal Cost||Late Fee|
|1||Form -11 - (FY 2017-18)||671||50||67,100|
|3||Form - 8 - (FY 2017-18)||518||50||51,800|
|7||Form -11 - (FY 2018-19)||306||50||30,600|
|8||Form - 8 - (FY 2018-19)||153||50||15,300|
As you can see from the above table that under the Companies Fresh Start Scheme there is substantial saving of Rs. 164800/- on Late Fee apart from immunity from the prosecution by the ROC.
What will happen to those LLP, which does not take advantage of this Scheme?
The LLP Settlement Scheme is valid until 30th September 2020. We urge you to file all pending LLP Returns without any second thought and come clean. We have never seen such an amnesty scheme giving a one time waiver of additional fee/late fee for all the pending MCA E-Forms.
However, if someone misses the opportunity, then the ROC would go behind all the designated partners/partners and file prosecution cases. The exorbitant additional fee will come in way while filing the old return to the ROC. In short the LLP which could not take advantage of this scheme shall face all the consequences as may be applicable to a defaulter in the Limited Liabilities Act, 2008.
How can setindiabiz help us in filing all pending forms under LLP Settlement Scheme 2020?
Setindiabiz provides professional service for, Registration of Companies & LLPs with the registrar of companies all over India and to obtain all kinds of Licences as may be necessary. We further assist the companies and LLPs to meet all the compliances and provide services of a Chartered Accountant, Company Secretary and Lawyers at one single place. We shall help you to do due diligence for this scheme and then you can avail of our services for filing of the pending LLP Returns.
Where can I go to meet the Setindiabiz advisor to understand in detail about the LLP Settlement Scheme?
We have our offices located in Delhi, Mumbai, Bangalore and Hyderabad. You are welcome to meet us at any place as per your convenience. However please take prior appointment before walking in to our offices.