Presentation on llp settlement scheme, 2020

1. PRESENTATION
ON
LLP SETTLEMENT SCHEME, 2020
Ministry of Corporate Affairs
Corporate Law Vertical
Asija & Associates LLP
E-Mail : corporatelaws@asija.in

2. Coverage….
Introduction
Modification in the Scheme
What is the Scheme?
Initial Scheme vs. Modified Scheme
Benefits under LLP Settlement Scheme
Conclusion

3. INTRODUCTION
The Ministry of Corporate Affairs notified “LLP Settlement Scheme, 2020” vide
General Circular No. 6/2020 dated 04th march, 2020 in light of the following concerns:-
1. Innumerous LLPs were found to have been defaulting in filing of :-
- Particulars of Initial LLP Agreement and subsequent changes therein.
- Annual Filings i.e., filing of Annual Return and Statement of Accounts & Solvency.
2. Filing of the delayed documents and returns were attracting heavy additional fee which was
Rs. 100/- per day of default for each document / return.
3. MCA was in receipt of innumerous representations from various quarters for waiver of fee or
condonation of delay and relaxations in additional fee on the ground of excessive financial
burden.
4. As part of Government's constant efforts to promote ease of doing business it has been
decided to give a Onetime relaxation in additional fees to the defaulting LLPs to make good
their default by filing pending documents and to serve as a compliant LLP in future.
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4. MODIFICATION IN THE SCHEME
With the outspread of Corona Virus (COVID-19) throughout the country the Central Government
came up with a notification called “Special Measures under Companies Act, 2013 (CA-2013) and
Limited Liability Partnership Act, 2008” on date 24th March, 2020.
MCA’s Special Measures stated that no additional fees shall be charged from LLPs for late filing
during a moratorium period from 1st April, 2020 to 30th September, 2020, in respect of any
document, return, statement etc. irrespective of its due date.
 In line with Special Measures, a notification for modification in the LLP Settlement Scheme was
issued by MCA on 30th March, 2020. The “Modified Scheme” re-designed the original “LLP
Settlement Scheme” and expanded the compliance relief for defaulting LLPs.
The original scheme was notified for period starting from 16th March, 2020 to 13th June, 2020. The
Modified Scheme concluded the original scheme on 31st March, 2020, and fresh scheme came into
play w.e.f. 1st April, 2020 up to 30th September, 2020.
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5. WHAT IS LLP SETTLEMENT SCHEME?
Duration of Scheme:
This scheme shall come into force on the 01st April, 2020 and shall remain in force up to
30th September, 2020.
Applicability of the Scheme:
Any defaulting LLP is permitted to file belated documents, which were due for filing till
31st August, 2020 in accordance with the provisions of this Scheme.
“Defaulting LLP" means an LLP registered under the Limited Liability Partnership
Act, 2008 which has made a default in filing of documents on the due date(s) specified
under the LLP Act, 2008 and rules made there under.
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6. Continued…
Manner of payment of fees and additional fee on filing belated document for seeking
immunity under the Scheme:
The defaulting LLPs may themselves avail of the scheme for filing documents which have
not been filed or registered in time on payment of normal fee as applicable as per its
contribution i.e., without levy of any additional fee.
Immunity from prosecution in respect of document(s) filed under the scheme:
The defaulting LLPs, which have filed their pending documents till 30th September 2020 and
made good the default, shall not be subjected to prosecution by Registrar for such defaults.
Scheme not to apply to:
This Scheme shall not apply to LLPs which has made an application in Form 24 to the
Registrar, for striking off its name from the register as per provisions of Rule 37(1) of the
LLP Rules, 2009.
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7. INITIAL LLP SETTLEMENT SCHEME VS. MODIFIED LLP SETTLEMENT SCHEME
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BASIS INITIAL SCHEME MODIFIED SCHEME REMARK AS TO
MODIFICATION
Tenure 16th March, 2020 to 13th June, 2020 1st April, 2020 to 30th September,
2020
Favorable
Applicability of
Scheme
Defaulting LLP is permitted to file
belated documents, which were
due for filing till 31st October, 2019
Defaulting LLP is permitted to file
belated documents, which were
due for filing till 31st August, 2020
Favorable
Payment of fees
& additional
fee
Permitted documents or return
were allowed for filing on payment
of normal fee along with an
additional fee of Rs 10 per day with
a ceiling of amount up to Rs.5,000/-
per document.
Pending documents or return shall
be filed by payment of normal fee
as applicable as per its contribution
i.e., without levy of any additional
fee.
Favorable
Permitted
Forms
Only filing of Form 3, Form 4, Form
8 and Form 11 were allowed.
Any pending form may be filed
under modified scheme
Favorable

8. BENEFITS UNDER LLP SETTLEMENT SCHEME
The Defaulting LLPs may file their pending Annual returns, Statement of
accounts & solvency, Particulars of initial LLP Agreement and subsequent
changes and other pending documents with MCA on payment of Normal Fee.
LLPs have an opportunity to
save heavy compliance cost
on account of pending ones.
On making the compliance good, the LLPs can
save it self and its designated partners from
penalties and prosecutions under the law.
The active LLPs can remain immune from
“Striking off the name of LLP from Register
of name of LLPs with Concerned Registrars.
Defaulting LLPs may
attain better corporate
governance.
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9. CONCLUSION
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 Amid COVID-19 outbreak the Ministry of Corporate Affairs left no stone unturned to tackle
the economic disruptions caused by it and help the Companies and LLPs to reduce their
compliance burden and enjoy certain relaxations.
 The Government recently came up with a notification of Modification to existing “LLP
Settlement Scheme” to empower the defaulting LLPs to fight against ill-effects of COVID-19
outbreak as part of it measure towards promotion of Ease of doing business.
 It is a golden opportunities for LLPs to make the compliance good and meet up to the
expectations of regulator and public at large.
 On the conclusion of the Scheme, the Registrar shall take necessary action under the LLP Act,
2008 against the LLPs which have not availed this Scheme and are in default in filing of
documents as required under the provisions of LLP Act, 2008 in a timely manner.

10. DISCLAIMER
 This presentation has been prepared by our firm to provide insight of the “LLP
Settlement Scheme, 2020”.
 For detailed insight and for better understanding of the various provisions of the
said law, our team shall be available to provide our professional consultancy in
this respect, if required by your office.
 Neither our firm nor any partner or employee or article of our firm shall be
responsible for any decision taken on the basis of the said presentation and
without obtaining our professional guidance or consultation on the matter for
which reliance was made on this presentation.
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11. For any Further Queries & Clarification Contact
CS. Manish Mishra
Director
Corporate Law Vertical
manish.mishra@asija.in
Corporate Law Vertical
Asija & Associates LLP
corporatelaws@asija.in