COMPANY LAW
LLP Settlement Scheme, 2020: Highlights
Introduction
The Limited Liability Partnership (LLP) is seen as an alternative corporate business vehicle that gives the advantages of Limited Liability yet permits its individuals the flexibility of sorting out their inward structure as an organization in light of a mutually arrived agreement. Attributable to flexibility in its structure and activity, the LLP regularly become the favoured choice for little undertakings.
What’s happening in LLP’S?
It has come to the notification of Government that an enormous enormous number of LLPs have defaulted in recording Form 3 viz. LLP Agreement and changes in that in statutory return viz. Form 8-Statement of Account and Solvency (Annual or interim) and Form-11 Annual Return of LLP. In case of imperative forms not being recorded within endorsed time by, the LLPs may record such reports on the instalment of extra expense for one hundred rupees for each day of such delay under Section 69 of the LLP Act notwithstanding any expense as is payable for the recording of such documents or returns.
Because of this, the records accessible in the electronic library are not updated furthermore; they are not accessible to the partners for investigation. Further, due to not recording the necessary reports on time the LLPs and their assigned accomplices are at risk for criminal indictment and the said LLPs can’t be shut till all compliances are finished.
What has been introduced?
As a major aspect of the Government’s steady endeavours to advance simplicity of doing business it has been chosen to give a one-time relaxation in additional charges to the defaulting LLPs to make good their default by recording pending reports and to fill in as a complaint LLP in the future.
Legal provision
The Central Government in the exercise of its capacity u/s 460 of the Companies Act, 2013 (reached out to LLPs vide Gazette Notification No. G.S.R. 59(E) Dated 30TH January 2020 u/s 67 (2) of the Limited Liability Partnership Act, 2008) has chosen to present a plan to be specific “LLP Settlement Scheme, 2020“, by permitting a One-time approbation of postponement in recording statutorily required reports with the Registrar.
Fees:
The defaulting LLPs may themselves avail profit of scheme for recording reports which have not been documented or then again enlisted in time on the payment of extra expense Rs 10 – every day for delay in addition to any charge as is payable for the recording of such report or return, provided that such payment of extra charge will not surpass Rs. 5,000- per document.
Immunity from prosecution in regard to the document(s) recorded under the plan –
The defaulting LLPs, which have documented their pending reports till 13th June 2020 and made good the default, will not be exposed to prosecution by Registrar for such defaults.
Scheme not to apply to specific reports
(a.) This Scheme will not make a difference to the recording of archives with the exception of the accompanying reports: –
(i.) Form-3-Information with respect to the limited liability partnership agreement and changes if any
(ii.) Form-4-Notice of appointment, cessation, change in name/address/designation of an assigned partner or partner and agree to turn into an accomplice/assigned accomplice;
(iii.) Form-8; Statement of Account and Solvency (Annual or Interim);
(iv.) Form-11-Annual Return of Limited Liability Partnership (LLP).
(b.) This Scheme will not matter to LLPs which has made an application in Form 24 to the Registrar, for striking off its name from the register according to arrangements of Rule 37(1) of the LLP Rules, 2009
Scheme applicable to
Defaulting LLP: Any “defaulting LLP” is allowed to record remiss archives, which were expected for documenting till 31st October 2019 as per the arrangements of this Scheme. for example, forms that are expected till 31st October 2019 must be considered for the said conspire.
“Defaulting LLP” signifies LLP enlisted under the Limited Liability Partnership Act, 2008 which has made a default in the recording of reports on the due date(s) indicated under the LLP Act, 2008 and rules made thereunder.
Conclusion:
On the finish of the Scheme, the Registrar will make an important move under the LLP Act, 2008 against the LLPs which have not benefited this Scheme and are in default in the recording of reports as required under the arrangements of LLP Act, 2008 of every a convenient way.