LLP Amnesty Scheme for Financial Year 2022-23

Introduction:

An "amnesty scheme" usually refers to a government program that grants individuals or entities certain benefits or relief by allowing them to rectify their past non-compliance with certain regulations, laws, or taxes without facing severe penalties. In the context of Limited Liability Partnerships (LLPs), an amnesty scheme might involve giving LLPs an opportunity to address any non-compliance issues they might have without facing the full consequences they would normally incur.

Difficulty in filing Form 3, Form 4, and Form 11: 

• Form 3 is required for the LLP agreement and changes therein. 

• Form 4 is required for notice of appointment, cessation, change in name/ address/designation of a designated partner or partner, and consent to become a partner/designated partner.

• Form 11 is required for the Annual Return of the LLP

• Certain LLPs are finding difficulty in filing for 3, Form 4, and Form 11 because there have been several reasons out of which is that there is a mismatch in the master data in the electronic registry of the ministry. 

How to overcome the difficulty?

The Ministry has decided to grant a one-time relaxation in additional fees to those LLPS who could not file Form-3, Form-4, and Form-11 within the due date and provide an opportunity to update their filings and details in master data for future compliances in order to address these difficulties faced by the LLPS and as part of the Government's ongoing efforts to promote ease of doing business. This decision was made in the exercise of the Ministry's power under section 67 of the Limited Liability Partnership Act, 2008.

Additional Features:

• All processing of Forms 3 and 4 will be done in Straight Through Processing (STP) mode, with the exception of changes to business operations. The stakeholders are urged to submit these forms in sequential order, with the filing for older events dates coming first, and so on, in order to properly update the master data.

• Each of the aforementioned forms must have pre-filled information from the LLP's master data available at the time of filing, but these forms must also allow for editing. The stakeholders would be responsible for providing accurate data. The Designated Partner and the professional certifying the form may be held accountable for negative consequences under the law in the event of misrepresentation.

• Forms 3 and 4 can be filed without paying an additional cost starting on January 1, 2021, for events that start after that date. These forms can be filed with additional fees equal to 02 times and 04 times the standard filing price for small LLPs and other than small LLPs, respectively, for events that occurred before 01.01.2021.

• For the financial year 2021–2022, the filing of Form 11 without an additional fee shall be applicable. For small LLPs and other than small LLPs, the additional filing charge for Form-11 for prior years (before to financial year 2021-22) is 02 times and 04 times the regular filing fee, respectively. These forms shall be available for filing from 01.09.2023 onwards till 30.11.2023 (both dates inclusive).

• The LLPs that use the program are exempt from any consequences for filing Forms 3, 4, and 11 late.

Conclusion:

Hence, the latest amnesty scheme provides relief to LLPs in filing form 3, form 4, and form 11. As the LLPs are facing difficulty in filing these forms, the ministry came up with an ease to them and get it updated if could not be filed at that particular time. This has been sunlight in absolute darkness for the LLPs to deal with form filling.

Author:

Pihu Agarwal
Delhi
4th year BBA LLB Fairfield Institute of Management and Technology