In a significant move aimed at promoting ease of doing business and addressing the challenges faced by Limited Liability Partnerships (LLPs), the Ministry of Corporate Affairs (MCA) has introduced the LLP Amnesty Scheme through General Circular No. 08/2023 dated August 23, 2023. This scheme offers a unique opportunity for LLPs to rectify their compliance oversights and update their filing details. Let’s delve into the key highlights of this amnesty scheme and understand how it can benefit LLPs.
Background and Rationale
The introduction of the LLP Amnesty Scheme stems from the acknowledgment by the Government of the hurdles faced by numerous LLPs in fulfilling their compliance obligations. These difficulties often arise due to various reasons, including discrepancies in the master data maintained by the Ministry’s electronic registry. Such challenges not only hinder the timely filing of essential documents but also impede the accurate updating of records.
To tackle these issues and foster a business-friendly environment, the Ministry has invoked its authority under section 67 of the Limited Liability Partnership Act, 2008. The scheme is a manifestation of the Government’s continuous endeavors to facilitate smooth business operations and bolster the compliance framework.
Features of the LLP Amnesty Scheme
- Scope of Application: The scheme encompasses three critical forms: Form-3 (pertaining to LLP Agreement and modifications), Form-4 (covering appointments, cessations, changes in name/address/designation of designated partners/partners, and consent to join), and Form-11 (Annual Return of LLP).
- Condonation of Delay: Under the LLP Amnesty Scheme, LLPs can seek condonation for the delay in filing Form-3, Form-4, and Form-11. This relief period spans from September 1, 2023, to September 30, 2023.
- Straight Through Process (STP): In a bid to expedite the processing of Form-3 and Form-4, the STP mode will be employed, except for cases involving alterations in business activities. It is advised that these forms are filed in chronological order of event dates for accurate master data updates.
- Pre-Filled Data: While filing the aforementioned forms, the pre-filled data from the existing master data of the LLP will be auto-populated. However, this data can be edited as necessary. The onus of submitting accurate information lies with the stakeholders, and any misrepresentation may entail legal consequences for designated partners and certifying professionals.
- Additional Fees Structure: For Form-3 and Form-4 filings related to events dated January 01, 2021, onwards, no additional fee will be levied. However, for events preceding January 01, 2021, LLPs will be subject to additional fees equal to twice the normal filing fee for small LLPs and four times for other than small LLPs. Similarly, for Form-11 filings for the financial year 2021-22 onwards, no additional fee will apply. For prior years, additional fees will be two times for small LLPs and four times for other than small LLPs.
- Filing Window: The LLP Amnesty Scheme is open for filings from September 01, 2023, to September 30, 2023, inclusive of both dates.
- Non-Liability for Delay: LLPs availing the benefits of the scheme will be shielded from any legal action arising due to delayed filing of Form-3, Form-4, and Form-11.
The General Circular can be accessed at: https://www.mca.gov.in/bin/dms/getdocument?mds=Zt6foWsl%252BABAbU7Pid9NGg%253D%253D&type=open
The LLP Amnesty Scheme 2023 emerges as a beacon of hope for LLPs grappling with compliance-related challenges. This initiative underscores the Government’s commitment to fostering an enabling business ecosystem and acknowledges the need for pragmatic solutions to address hurdles faced by enterprises. By offering a window of opportunity to rectify past filing discrepancies, the scheme paves the way for smoother operations and enhanced trust in the regulatory framework. Eligible LLPs are urged to seize this chance to ensure their filings are up-to-date and in alignment with the compliance framework.
Please feel free to contact us to complete the pending compliances of your LLP.