LLP Settlement Scheme: MCA extends due date under LLP Settlement Scheme to November 30

Economy


The ministry of corporate affairs (MCA) extended till November 30, the due date for defaulting LLPs to file belated documents under the LLP Settlement Scheme.

While the scheme, aimed at improving compliance with regulatory filings, was previously extended till the end of this calendar year, defaulting LLPs were permitted to submit documents due for filing till August 31, under the scheme.

“If a statement of account and solvency for the financial year 2019-2020 has been signed beyond the period of six months from the end of financial year but not later than 30th November, 2020, the same shall not be deemed as non-compliance,” said the MCA circular issued on Monday.

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The decision was made to align the validity of the scheme with the due date for signing off on various statutory filings, according to Pavan Kumar Vijay, founder of Corporate Professionals.

“Generally, a period of one month is allowed between signing these documents and filing them with the regulator. While the backend system already permits documents signed one month ahead of the December deadline to be filed, the circular has corrected the date mentioned in the scheme,” Vijay said.

Introduced by the MCA on March 4, the scheme provided LLPs with a one-time condonation of defaults in regulatory filings from October 31 last year, along with a reduction in the applicable late fees.

While improving the ease of doing business, the scheme was aimed at LLPs that could neither comply nor exit on account of large amounts of accumulated late fees.

The scheme would likely benefit some 30,000 LLPs whose paid up capital was Rs 1 lakh but accumulated late fees had reached Rs 5 lakh and above, officials had said.

Initially, the scheme was valid till June 13, but was twice extended “in view of large scale disruption caused by the COVID-19 pandemic”.



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