MCA Extends the Due Date under LLP Settlement Scheme 2020

Shivani Jain | Updated: Nov 11, 2020 | Category: Limited Liability Partnership, News

All the LLPs (Limited Liability Partnerships) registered under the provisions of the Limited Liability Act 2008, need to file two statutory forms, i.e., Form 11 and Form 8on an annual basis.

Further, an LLP requires to submit the “Annual Return in Form 11 within 60 days”, starting from the date of end of the financial year, i.e., by 30^th May of the succeeding financial year.

Also, it needs to furnish the “Statement of Account & Solvency in Form 8 within 30 days” starting from the date expiry of six months from the end of the financial year, i.e., by 31^st October of the following financial year.

However, the Ministry of Corporate Affairs (MCA)^[1] by way of a General Circular No. 37/2020 issued on 09.11.2020 has extended the due dates for submitting the Belated Documents from 30.11.2020 to 31.12.2020.

In this blog, we will discuss thoroughly about the extended due dates of filing Belated Documents under LLP Settlement Scheme 2020.

Table of Contents

Issues Covered Under General Circular No. 37/2020

The issues covered under General Circular No. 37/2020 are as follows:

Rectification of the Irregularity in Extension of LLP Scheme 2020.
Extension of Due Dates for Filing Form 8.

Applicability of LLP Settlement Scheme 2020

All the Defaulting LLPs who need to file belated documents or specified forms are covered under the ambit of LLP Settlement Scheme 2020.

However, it shall be relevant to state that the LLPs that have already submitted an application in Form 24 under rule 37 (1) of the LLP Rules 2009, for Strike off their name to the Registrar are not covered under the ambit of LLP Settlement Scheme 2020.

Definitions under LLP Settlement Scheme 2020

The two main definitions under LLP Settlement Scheme 2020 are as follows:

Defaulting LLP

The term “Defaulting LLP” denotes a Limited Liability Partnership Firm that has made default in filing of the documents within the Due Dates prescribed under the LLP Act 2008 and the rules made thereunder.

Belated Documents

The term “Belated Documents” denotes the forms and documents that are needed to be filed under MCA21, in accordance with the provisions of the Limited Liability Partnership Act 2008 and the rules made thereunder.

Also, Read: What are the Key Highlights of Limited Liability Partnership?

Reasons Behind the Extension in Due Dates

The Reasons behind the Extension of Due Dates are as follows:

To provide support to Limited Liability partnership In India that are registered.
To focus on taking required measures to deal with the COVID-19 pandemic
To reduce Compliance Burden
To boost Indian Economy
To offer relief to Corporates

Rectification of Irregularity in Extension of LLP Scheme 2020

On 09.11.2020, the Ministry of Corporate Affairs has issued a General Circular No. 37/2020^[2], in the continuance of its previous General Circular No. 31/ 2020 dated 28.09.2020 and General Circular No 13/ 2020 dated 30.03.2020. Further, this circular is related to the Extension of LLP Settlement Scheme 2020.

The reason for issuing General Circular No. 37/2020 was to rectify the irregularity arising out of its previous Circular No 13/2020 dated 30.03.2020.

Overview of General Circular No. 13/2020

By way of General Circular No. 13/2020, dated 30.03.2020, the MCA (Ministry of Corporate Affairs) has modified the provisions concerning LLP Settlement Scheme 2020. The main amendment bought was to allow one time condonation of delay in filing of documents and statutory forms by LLPs with the Registrar.

Further, by way of the LLP Settlement Scheme 2020, every “Defaulting LLP” was allowed to file its belated documents and statutory forms with the registrar by 31.08.2020, in accordance with the provisions of the Settlement Scheme.

Earlier, the last date for availing of the benefit of the Settlement Scheme was 30.9.2020. However, the same has been extended till 31.12.2020 by way of MCA General Circular No. 31/2020, dated 28.09.2020.

Need of General Circular No. 37/2020

As we know that, the last date for availing of the benefit of the Settlement Scheme has been extended till 31.12.2020 by way of MCA General Circular No. 31/ 2020, dated 28.09.2020.

However, it shall be significant to mention that no such parallel extension was being made in the cutoff date of the Settlement Scheme, i.e., the due date up to which the statutory documents or forms were originally required to be filed. Further, the due dates were 31.08.2020.

Therefore, the omission in the extension of the cutoff date was resulting in an irregularity, wherein the “Defaulting LLPs” were allowed to file statutory forms upto 31.12.2020, which were due for filing upto 31.08.2020.

However, no such relaxation was given for the Statutory Documents or Forms, comprising of the Statement of Account and Insolvency in Form-8, which were due for filing after 31.08.2020.

As a result, this irregularity was resulting in some irrational conclusions, in which the defaulting LLPs were able to file their Form 8 for the F.Y. 2018 – 2019, belatedly up to 31.12.2020, but were unable to avail of similar extensions by filing of the Form-8 for the F.Y. 2019 – 2020. Further, the due date for filing of Form-8 for the F.Y. 2019 – 2020 is 31.10.2020, which is clearly comes after 31.08.2020.

Outcome of General Circular No. 37/2020

After taking cognizance of this irregularity, MCA has decided to extend the cutoff dates for the applicability of the Settlement Scheme 2020 till 30.11.2020 from 31.08.2020.

Consequently, the defaulting LLPs will now be able to file their belated statutory documents or forms including Form 8 and 11 by 31.12.2020, which were earlier to be filed on or before 30.11.2020.

In short, now a defaulting LLP can file form 8 and 11 for the Financial Year 2019 – 2020 by 31.12.2020.

Extension of Due Dates for Filing Form 8

Also, it shall be taken into note that MCA by way of the same notification, i.e., General Circular No. 37/2020, dated 09.11.2020, has provided that if a “Statement of Account and Solvency”, i.e., Form 8 for the F.Y. 2019 – 2020 has been signed after the expiry of 6 months, starting from the end of the financial year, but not later than 30.11.2020, the same will not be considered as “Non-compliance.

That means the actual date of filing Form 8 for the F.Y. 2019 – 2020 by LLPs has been extended to 30.11.2020 from 31.10.2020. Also, the LLPs filing Form 8 shall not be deemed as Defaulting LLPs.

However, it shall be pertinent to state that, if an LLP commits default in filing Form 8 for the F.Y. 2019 – 2020 by 30.11.2020, then such a firm will not be able to avail of the benefit of the LLP Settlement Scheme 2020. Further, the term “Benefit” denotes the facility to belatedly file Form 8 for the F.Y. 2019 – 2020 by 31.12.2020.

Conclusion

In a nutshell, in the continuance of General Circular No.13/ 2020 and 31/ 2020, dated 30.03.2020 and 28.09.2020 respectively, MCA has extended the due date for filing statutory forms under LLP Settlement Scheme 2020. The reason behind the same is to provide support to LLPs (Limited Liability partnerships) that are registered in India amid COVID-19 pandemic.

Also, the MCA has decided to rectify the irregularity earlier caused by extending the cutoff dates for the applicability of the Settlement Scheme 2020 till 30.11.2020 from 31.08.2020. That means now a defaulting LLP can file form 8 and 11 for the Financial Year 2019 – 2020 by 31.12.2020.

Further, the MCA has extended the actual date of filing Form 8 for the F.Y. 2019 – 2020 by LLPs to 30.11.2020 from 31.10.2020 as well.

Also, Read: What is LLP Registration Procedure in India?