ENS Economic Bureau
| New Delhi |
Published: March 4, 2020 1:46:01 am
Under the scheme, LLPs will be given a three-month window to complete overdue filings of four forms through which LLPs provide details of the LLP agreement, partners as well as statement of accounts and annual returns. (File Photo)
The government is set to introduce an amnesty scheme for Limited Liability Partnership (LLP) firms for delays in mandatory filings which could benefit 20-25 per cent of the 1.25 lakh LLPs registered in the country. The move is aimed at bringing non-compliant LLPs into the legal fold, a senior government official told the Indian Express.
Under the scheme, LLPs will be given a three-month window to complete overdue filings of four forms through which LLPs provide details of the LLP agreement, partners as well as statement of accounts and annual returns.
The scheme which is set to be run for 90 days from March 16 to June 13 will allow LLPs to file these forms for a delay fee of Rs 10 per day with a maximum of Rs 5,000 per form. Under the LLP act, the charge for delayed filing is Rs 100 per day with no upper limit.
The government had in January extended a provision in the Companies Act to LLPs allowing it to condone delays in filing of documents. LLPs are a lower cost and lower compliance business structure relative to companies.
“We have extended these provisions to the LLP act and under that we are bringing a settlement scheme for these 4 forms,” said a senior government official adding that over 11,000 LLPs had not yet filed forms 3 and 4 which provide details of the LLP agreement and partners.
“In cases where these forms have not been filed for 10 years, a stakeholder may have to pay over Rs 3.5 lakh (under the LLP Act). They are presently not completing filings because it is too expensive,” the official said adding that the settlement scheme would allow these LLPs to come back within the fold of the law.
Experts say the move would improve compliance and may even prompt some LLPs to re-initiate business activity.
“They (LLPs) can regularise their non-compliance. A lot of the LLPs have stopped carrying out activities because they found out after a couple of years of starting their LLPs that these filings were to be done and that there were large additional fees to be paid and had chosen to start business in other forms. They can now re-initiate business activities,” said Ankit Singhi, partner at law firm Corporate Professionals.
“This move will also bring such LLPs back into the fold of the compliance regime,” he added.
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