All about LLP Amnesty Scheme – 2023

Introduction:

The Ministry of Corporate Affairs (MCA) has recently rolled out a new initiative, General Circular No 08/2023 dated August 23, 2023, aimed at facilitating Limited Liability Partnerships (LLPs) to address challenges associated with filing discrepancies. This scheme, while proving to be a positive step towards promoting business ease, has raised questions about its scope and inclusivity. This blog will guide you in detail about the LLP Amnesty scheme, its eligibility along with frequently asked questions.

Scope of the Amnesty Scheme:

The MCA’s amnesty scheme, under Section 67 of the LLP Act, 2008, seeks to provide relief to LLPs grappling with technical glitches on the MCA site and data discrepancies. While this scheme fosters leniency in terms of additional fees and delayed actions for filing Form-3, Form-4, and Form-11 under Section 68 of the LLP Act, 2008, it curiously leaves out Form LLP 8. This omission has raised concerns and warrants reconsideration to offer a comprehensive amnesty to all relevant forms.

Benefits of the Scheme:

The eligible forms filed under this scheme can be filed without payment of additional fees. Further, the LLP’s availing this scheme shall not be liable for any action for delayed filing.

For example: Imagine XYZ LLP, a Limited Liability Partnership incorporated on 1^st October, 2020 with a contribution of INR 1,00,000 is non-compliant due to non-filing of Form 3 (Initial Agreement or any other changes) and Form 11 (Annual Return).

Below is the chart depicting the difference in additional fees under normal circumstances and under LLP Amnesty Scheme, that XYZ LLP will have to pay rectify its compliance status:

Thus, above table clearly depicts the benefit that XYZ LLP can get by the scheme, without payment of these additional fees and saving around INR 10,450.

MCA’s amnesty scheme proves to be a game-changer for LLPs like XYZ LLP, offering a second chance to rectify compliance errors and become compliant without the worry of additional fees and penalties. This example highlights how the scheme empowers non-compliant LLPs to embrace compliance and contribute to a business-friendly environment.

*The LLP Amnesty Scheme is not applicable to Form-8.

Eligible Forms under this Amnesty Scheme:

This scheme covers the following forms:

Form LLP-3: Filing of Information with the Registrar regarding Limited Liability Partnership Agreement and changes therein.

Form LLP-4: Notice of appointment, cessation, or change in designation of a designated partner or partner.

Form LLP-11: Annual Return of Limited Liability Partnership (LLP) containing information as on the close of the financial year.

Processing of Forms filed under this scheme:

Form 3 and Form 4 – The forms will be processed under STP (Straight Through Processing) mode; except if the Form is being filed for change in business activities, which will be processed under Approval route.

Form 11 – Form 11 will be processed under STP (Straight Through Processing) mode.

Points to be considered before filing these Forms:

• Forms shall be filed in sequential order. For example, if there are two events on different date, then these should be filed in the order of occurrence to prevent disruptions in updating information in Master Data.
• Stakeholders to ensure that correct data is being filed, as adverse action shall be taken for any misrepresentation.

Fees applicable for Forms filed (under LLP Amnesty Scheme, 2023):

Amnesty Scheme Duration:

This amnesty scheme is accessible for filing these forms from September 1, 2023, until November 30, 2023. Subsequently, adherence to the LLP Act, 2008, will dictate the imposition of additional fees.

Frequently Asked Questions:

What is the purpose of the amnesty scheme introduced by the Ministry of Corporate Affairs (MCA)?

The amnesty scheme introduced by MCA aims to provide relief to Limited Liability Partnerships (LLPs) facing challenges related to filing discrepancies. It offers leniency in terms of additional fees and delayed actions for filing specific forms under the LLP Act, 2008.

Which forms are covered under this amnesty scheme?

The following forms are covered under the amnesty scheme for LLPs:

• Form LLP 3
• Form LLP 4
• Form 8

How will the forms be processed under this scheme?

All the Forms under this scheme will be processed through the STP (Straight Through Processing) mode, meaning they will be automatically approved for most cases. However, certain scenarios, such as changing business activity with a specific option selected, will be subject to approval route.

Is there a specific sequence to file these forms?

Yes, filing these forms sequentially is crucial. If an LLP needs to file multiple LLP-3 or LLP-4 forms, it’s recommended to start with the “Old Event Date Form” and proceed in order. This ensures the proper updating of master data.

What is the timeline for filing forms under this scheme without additional fees?

For LLP-3 and LLP-4, forms with due dates on or after January 1, 2021, can be filed without additional fees. Forms with due dates on or before December 31, 2020, can be filed with additional fees, varying based on the size of the LLP.

Is there a specific period for filing LLP-11 under this scheme without additional fees?

Yes, only Form LLP-11 related to the financial year 2021–22 and onwards can be filed under this scheme without additional fees. Earlier years’ filings are subject to the additional fees, varying based on the size of the LLP.

How long is the amnesty scheme available?

This amnesty scheme is accessible for filing these forms from September 1, 2023, until November 30, 2023. After this period, regular additional fees will apply.

Are the pre-filled fields in Form LLP-11 editable?

Yes, all the pre-filled fields in the Excel file for Form LLP-11 are editable, and LLPs can also add or delete rows or columns as needed.

Is Form LLP-8 included in this scheme?

No, currently this scheme does not cover Form 8. However, including Form LLP-8 would enhance the scheme’s effectiveness in simplifying compliance for LLPs and promoting a business-friendly environment.

Conclusion:

MCA’s amnesty scheme offers a welcome respite to LLPs struggling with filing challenges. However, the exclusion of Form LLP 8 appears to be a missed opportunity. A comprehensive approach that includes all pertinent forms would further enhance the scheme’s effectiveness in simplifying compliance for LLPs, in alignment with the broader goal of fostering a business-friendly environment.

However, it is a great opportunity for the LLP’s which have missed these filings due to certain reasons to comply with the same. For any further queries on LLP Amnesty Scheme, please reach out to our experts at Instafiling, who can assist you in filings as well.