How to Close an LLP Incorporating in 2014 Without Incurring a Significant Fine

With the impact of the Covid-19 situation and the challenges faced by businesses, a new scheme called the LLP Settlement Scheme 2020 has been released by the Ministry of Corporate Affairs (MCA). This scheme provides a one-time opportunity for defaulting Limited Liability Partnerships (LLPs) to file all their overdue annual forms, such as Form 8 and Form 11, and other compliance forms, with the waiver of complete late fees, provided the filings are completed before September 30, 2020.

Understanding the LLP Settlement Scheme 2020

The LLP Settlement Scheme 2020 offers significant relief to defaulting LLPs by allowing them to file all past forms, including Form 8, Form 11, and other compliance forms (Forms 3 and 4), free of late fees and penalties. This is a remarkable advantage as it eliminates the financial burden associated with unpaid compliance penalties.

Eligibility Criteria for the LLP Settlement Scheme 2020

To avail of this scheme, the LLP must have:

Not filed the required proceedings as per the MCA regulations. Not paid the associated late fees. filed the necessary forms by the stipulated deadline, which is September 30, 2020.

Steps to Close Your LLP Using the LLP Settlement Scheme 2020

Check Compliance Status: Review all the past filings to identify which forms are outstanding. File the Forms: Submit all the overdue forms (including Form 8, Form 11, and other compliance forms) to the MCA. Monitor the Status: Keep track of the filings to ensure they are processed without any errors. Seek Legal Advice: Consult with an experienced legal advisor to ensure that all required documents are submitted correctly and that the LLP is in compliance with all regulations. Consider Winding Up: Post-compliance, if required, you can consider the winding up of the LLP to formally dissolve the partnership.

Additional Benefits of the LLP Settlement Scheme 2020

In addition to waiving late fees, this scheme provides several other benefits:

Legal Protection: By resolving outstanding compliance issues, the LLP is protected from potential legal actions and fines. Peace of Mind: Clearing all past liabilities brings a sense of relief and reduces stress. Enhanced Credibility: A fully compliant LLP enhances the credibility and trustworthiness of the business.

The Current Status of LLP Settlement Scheme 2020

The LLP Settlement Scheme 2020 has now been extended and provides further assistance to defaulting LLPs. As of April 1, 2020, the scheme has been expanded to allow LLPs to submit any overdue forms without incurring late fees.

Conclusion

The LLP Settlement Scheme 2020 is a significant relief for businesses that have been struggling to keep up with MCA compliance. By taking advantage of this scheme, you can avoid large fines and start the process of closing your LLP. It is essential to act promptly and ensure all forms are filed before the deadline to enjoy the benefits of this scheme.