What is meant by LLP Compliances?
Limited Liability Partnerships (LLP) are rising as far back as the presentation of the Companies Act, 2013 as it is a type of business substance, which enables individual partners to be liberated from the idea of joint liability of partners accomplices in an Patnership firm. Presently, as the Government is expanding the compliances and exposures for a Company type of structure, the greater part of the individuals are picking LLP type of business because of its basic and less perplexing compliances. Be that as it may, one must be cautious and genius dynamic about the compliances of LLP as a large portion of its Form includes every day punishment.
Advantages for LLP in comparison to a Private Limited company
1. Exemptions from maintenance of Minutes book, Statutory Registers, and flexible tax rates etc.
2. No, AGM is not required for an LLP. AGM is a once in a year meeting for Shareholders of the Company. As there is no concept of shareholding in an LLP, no AGM is to be held.
3. Board meeting is generally associated with a Board of Directors meeting. There are no directors involved in an LLP, instead designated Partners run the business and are held responsible for compliances. Hence, Board of Partners meeting is suggested in case of an LLP firm.
4. There is no limit on maximum number of partners.
What are Mandatory Compliances for an LLP?
Registered LLPs with the Ministry of Corporate Affairs (MCA) needs to file the following mandatory compliance requirements :
I. Filing of Annual Return – LLP Form-11
II. Filing Statement of Account & Solvency – LLP Form-8
Brief Overview of the Mandatory LLP Compliances:
1. Filing LLP Annual Return Annual Return or Form 11 is a summary of an LLP’s Partners and indication of change in the management.
Every LLP is required to file Annual Return in Form 11 to the Registrar within 60 days of closer of financial year i.e. has to be filed on or before 30th May every year.
2. Filing of Statement of Account & Solvency (Filing of Annual Accounts/ Statement of Accounts/ Financial Statements/ P&L & Balance Sheet)
a) LLP must maintain proper books of account. The accounts may be on cash basis or accrual basis.
b) Statement of Solvency (Accounts) needs to be prepared every year ending on 31st March.
c) LLP Form – 8 should be filed with the Registrar of Companies on or before 30th October every year.
d) It should be noted that LLPs / FLLPs whose annual turnover exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to get their accounts audited by auditor of the LLP/ FLLP mandatorily.
Tabular classification of Mandatory ROC Return of LLP
| Sl. No. | E-Form | Due Date |
|---|---|---|
| 1. | Annual Return (Form 11) | within 60 days of closer of financial year (For F.Y. 2018-19 due date is 30-05-2019) |
| 2. | Statement of Account & Solvency (Form 8) | on or before 30th October every year (For F.Y. 2018-19 due date is 30-10-2019) |
Filing of Income Tax Return
LLP can file its return of income in ITR 5. it is mandatory for LLP to file return of income electronically under digital signature if its accounts are required to be audited under section 44AB.
| Sl. No. | Income Tax Return Particulars | Due Date |
|---|---|---|
| 1. | In case Audit is not required (Those LLPs whose annual turnover does not exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to file their Income Tax. They are not required to get their accounts audited by their Auditor) | 31st July of every year |
| 2. | In Case Audit is required (Those LLPs whose annual turnover exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to file their Income Tax. They are required to get their books audited under the Income Tax Act.) | 30th September of every year |
| 3. | (LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant.) | 30th November of every year |
Documents Required for Filling Annual Compliances of LLP
Bank Statements from 1st April to 31st March for all bank account in the name of LLP
Credit card Statements if Expenses are incurred by partners on behalf on LLP
Invoice of Purchases and sales during the year
Invoice of expenses incurred during the year
Copy of GST, VAT and other Tax returns(is applicable)
Copy of TDS challan Deposited(is applicable)
Steps for filing Annual Compliances of LLP
STEP 1
Documentation
STEP 2
Form 11
STEP 3
We will provide Balance Sheet
STEP 4
Income-Tax Return
STEP 5
Tax Audit Report
STEP 6
Form 8
Penalty Or Consequences For Not Filing Form 11 and Form 8
1. For LLP per day penalty of Rs 100 till the filing is completed (Separately for both forms)
for example: If the Form 11/ Form 8 of your LLP is not filed within the due dates and suppose the delay is of 10 days for each form then the Government penalty fees will be Rs 2000 in total i.e. "Rs. 1,000 (i.e. @ Rs. 100 per day for 10 Days) for Form 11 & Rs. 1,000 (i.e. @ Rs. 100 per day for 10 Days) for Form 8"
2. For Designated Partner: From Rs. 10,000 to Rs. 100,000 Penalty
3. ROC can issue Notice to LLP and initiate legal proceedings (like strike off).