LLP Annual Filings

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Overview

   To establish a Limited Liability Partnership (LLP), the returns should be filed periodically for maintaining compliance and escape substantial penalties under the law for non-compliance. A Limited Liability Partnership has only few compliance to be succeeded every year which is certainly lower as compared to the compliance needs to be placed on the private limited companies. However, the fines seem to be quite large. While non-compliance might only impose a Private Limited company INR 1 lakh in terms of penalties, it might impose an LLP up to INR 5 lakh.

What are the Checklist Items for Filing of Annual Compliance?

• Annual returns need to be filed with the Registrar of Companies.
• Annual returns to be filed as per the prescribed format of LLP Form 11.
• This is required to be filed within 60 days from the close of the financial year, or the 30th of May of each year.
• The LLP annual compliance has to be met by each and every registered LLP even if there is no business activity. In fact, it has to be met even if the LLP has been closed down and whether or not a business bank account exists.

What are the Documents Required Filing of Annual Compliance?

• Form 8

You must file the Form 8 inside 30 days from the completion of 6 months after a financial year ends. Two designated partners can sign this form digitally. Also, a company secretary/chartered accountant/cost accountant must certify the same. There are 2 parts in a Form 8 –

• Part A – The solvency statement
• Part B – Statement of expenditure & income, statement of accounts.

For not filing the Form 8 on time, a penalty of Rs 100 per day will be imposed.

• Form 11

This form contains details such as the total number of designated partners, details of partners along with details of body corporates as partners, contributions received by the partners and summary of all partners. All LLPs must file the Form 11 within 60 days after the end of the financial year, along with the fee prescribed. Therefore, the LLPs should file their Form 11 by 30th May every year.

An LLP will not be allowed to close or wind up till it files all its annual returns. Therefore, all LLPs must file their annual returns on time, to avoid penalties.

• Filing And Audit Obligation Under The Income Tax Act

Limited Liability Partnerships whose turnover is higher than INR 40 lakh or whose participation has exceeded INR 25 Lakh have to get the books of account audited by practicing ‘Chartered Accountants.’ The last date to file the tax return for an LLP, which is supposed to get his books evaluated, is September 30.

• Late Fees For Form LLP 8 And LLP 11 Filing

If there is a noticeable delay in filing Form 8 and 11 of LLP, a penalty of Rs. 100 per day per form is payable from the due date of filing return till the actual date return is filed.

Privileges for LLP in corresponding to a Private Limited Company

• Exceptions from the preservation of Minutes book, Statutory Registers, and adjustable tax rates.
• AGM is not a mandate for an LLP. AGM is previously in a year gathering for Shareholders of the Company. As there is no theory of shareholding in an LLP, none AGM should be held.
• The board meeting is commonly associated with a Board of Directors conference. There are no directors included in an LLP, instead of selected Partners run the business and are held accountable for compliances. Therefore, the Board of Partners meeting is suggested in the event of an LLP firm.
• There is no boundary on the highest number of partners.

Frequently Asked Questions(FAQ’s)

What are the necessary compliances of LLP?

There are 3 compliances that are necessarily needed for every LLP to comply for any financial year.
• Annual Return
• Financial Statements of the LLP
• Income Tax Returns Filings.

What is the Audit Requirement for LLP?

Only those LLP whose annual turnover exceeds Rs. Forty lakhs or whose capital contribution exceeds Rs. 25 lakhs

What should I do if it is seen as status of SRN is ‘Sent for Resubmission?

You are required to re-submit your E-Form to rectify the incompleteness pointed out by the concerned MCA office.

What is the method of review of documents that are filled with ROC?

The First has to login to the Mca portal. Proper fees have to be paid and then following documents of LLP will be available for inspection :-
• LLP registration documents,
• Names of partners and changes, assuming any, made in that,
• Statement of Account and Solvency
• Financial Statement and annual return
• The expenses for such a review of an LLP are Prescribed by law.

Do I still need to file returns even if I do not take up any business in a particular year?

Yes, every LLP has to mandatorily file Annual Returns and financial statements with the Ministry even if they are not doing any business.

When it gets end of the first Financial Year of the LLP?

Due dates of LLP compliance are based on the closure of each financial year. Financial Year of every LLP must be closed on 31st March.
a) LLPs registered between 1st April and 30th September: The LLP must close its financial year on 31st March of next calendar year.
b) LLPs registered between 1st October and 31st March: The LLP has an option to choose the end of its financial year.

What is “Statement of Accounts and Solvency”?

Every LLP has to file LLP Form 8 annually, known as “Statement of Accounts and Solvency” which contains the information relates with financials of LLP like asset-liability etc.

What if LLP is incorporated on 1st December, then at what time financials will be filed?

If LLP has been incorporated on or after the first October of the financial year, then the first fiscal year of LLP can be of 18 months.