Introduction

Upon representations by various stakeholders and in the interest of all limited liability partnerships (“LLPs”), the Ministry of Corporate Affairs (“MCA”) recently came out with the LLP Settlement Scheme 2020. The purpose of the scheme is to condone the delay in filing of documents and provide a one-time waiver to LLPs from prosecution and imposition of additional fee, in order to enable LLPs to file all their documents.

LLP SETTLEMENT SCHEME

The central government in exercise of its powers under Section 460 of the Companies Act, 2013 (“Companies Act”) introduced the LLP Settlement Scheme, 2020 to grant a defaulting LLP a one-time window to condone the delay in filing of statutory returns and other forms as required with the Registrar of Companies (“RoC”). The MCA vide General Circular No – 6/2020 dated March 4, 2020 (“Circular”) issued the scheme after receiving representations from various business houses for waiver of fee, including additional fee, or condonation of delay taking the plea of excessive financial burden.

Thereafter, the MCA, vide General Circular No – 13/2020 dated March 30, 2020 (“Modified Circular”) modified the contours of the LLP scheme. This was done inter alia in order to support and enable LLPs registered in India to “focus on taking necessary measures to address the COVID-19 threat”. The Circular, read with the Modified Circular, thus imputes two sets of LLP schemes – one that was applicable from March 16, 2020 till March 31, 2020 (“LLP Scheme 1”) and the other that is applicable from April 1, 2020 till September 30, 2020 (“LLP Scheme 2”). The salient features of both are set out below

LLP Scheme 1

Paragraph 8 of the Circular sets out the LLP Scheme 1. Under this, any defaulting LLP was permitted to file belated documents which were due for filing till October 31, 2019, in accordance with the provisions of the LLP Scheme 1. The specific documents to which the LLP Scheme 1 applied are set out in Paragraph 8(vii) of the Circular, namely:

• i. Form-3: information with regard to the LLP 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-S: statement of account & solvency (annual or interim); and
• iv. Form-11: annual return of LLP.

The LLP Scheme 1 has been categorically made inapplicable to LLPs that have made an application in Form 24 to the RoC for striking o its name from the register as per the provisions of Rule 37(1) of the LLP Rules, 2009.

Any defaulting LLP was permitted to file the abovementioned documents, which were due for filing till October 31, 2019 in accordance with the provisions of the LLP Scheme 1. To avail this, the defaulting LLPs were required to make a payment of additional fee of Rs. 10 (ten) per day for delay, in addition to any fee as is payable for filing of such document or return. The additional fee in this case was capped to an aggregate of Rs. 5000 (five thousand) per document. The defaulting LLPs, which filed their pending documents till March 31, 2020 and made good the default, would not be subjected to prosecution by the RoC for such default.

It may be noted that the date of applicability of LLP Scheme 1 originally was from March 16, 2020 till June 13, 2020. However, vide the Modified Circular, the conclusion date was changed to March 31, 2020.

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