LLP settlement Scheme, 2020

Last updated: 05 March 2020

Save Share

Quick Summary

The Ministry of Corporate Affairs has introduced the LLP Settlement Scheme, 2020, to address a significant number of Limited Liability Partnerships (LLPs) that have defaulted in filing crucial documents. This scheme aims to provide an opportunity for these LLPs to regularise their filings, including the LLP Agreement (Form 3), changes therein, Statement of Account & Solvency (Form 8), and Annual Returns (Form 11). The initiative comes in response to numerous representations highlighting the financial burden of penalties for delayed submissions.

General Circular No. 6/2020
F.No.17/6112016(CL- V)-Pt-I

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
5th Floor, 'A' Wing Shastri Bhawan,
Dr. R.P. Road, New Delhi
Dated: 4th March, 2020

To,
All Regional Directors/ All Registrars of Companies,
All Stakeholders.

Subject:-LLP settlement Scheme, 2020-reg.

Sir,

It has been almost over a decade since LLP Act came into being. The Limited Liability Partnership (LLP) is viewed as an alternative corporate business vehicle that provides the benefits of Limited Liability but allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement. Owing to flexibility in its structure and operation, the LLP often become the preferred option for small enterprises.

2. It has come to the notice of Government that a large number of LLPs have defaulted in filing Form (3) viz. LLP Agreement and changes therein and statutory return viz. Form-8- Statement of Account & Solvency (Annual or
Interim) and Form-Tl- Annual Return of LLP. In the event of requisite forms not being filed within prescribed time presently LLPs may file such documents on payment of additional fee for one hundred rupees for every day of such delay under Section 69 of the LLP Act in addition to any fee as is payable for filing of such document or return.

3. A large number of representations were received from various quarters for waiver of fee or condonation of delay and relaxations in additional fee on the ground of excessive financial burden.

4. It is also noted that a large number of LLPs are not filing their due statutory documents (i.e. Information with regard to LLP agreement and changes etc., Notice of Appointment of Partner/ Designate Partner etc. and other Annual filing documents i.e. Statement of Account & Solvency and Annual Returns) in a timely manner with the Registrar. Form 3 is filed for filing Information with regard to LLP agreement and changes, if any made therein and Form-4 is for filing Notice of Appointment of Partner/ Designated Partner, his consent etc. which are required to be filed with the prescribed fee.

Please find the attached file to read more in details

FAQ :

The LLP Settlement Scheme, 2020 is an initiative by the Ministry of Corporate Affairs to allow LLPs to file their delayed statutory documents and regularise their status.

The scheme covers delayed filings of Form 3 (LLP Agreement and changes), Form 8 (Statement of Account & Solvency), and Form 11 (Annual Return of LLP).

The scheme was introduced due to a large number of LLPs defaulting on timely filings and in response to representations about the financial burden of penalties for delays.

Currently, LLPs may face a penalty of one hundred rupees for every day of delay under Section 69 of the LLP Act, in addition to the standard filing fees.

Statutory filings include information regarding the LLP agreement and changes (Form 3), notice of appointment of partner/designated partner (Form 4), statement of account & solvency (Form 8), and annual returns (Form 11).