LLP Compliance
LLP Compliance
Annual Compliance Filings for LLPs
What are Annual Filings? (Overview)
Limited liability partnerships (LLPs) are required to meet fewer criteria for compliance on filing annual returns, in comparison to private limited companies. LLPs are required to provide information related to the statement of accounts, and returns, on an annual basis. Penalties, however, are huge for failure to comply. Entities that don't provide the requisite information are fined heavily, with penalties that can go up to Rs. 5 lakhs.
Benefits of LLP Annual Filing Compliances
- Higher Credibility: Annual compliance provides for higher credibility to the organization for loan approvals or any other similar requirements.
- Higher Credibility: Annual compliance provides for higher credibility to the organization for loan approvals or any other similar requirements.
- Stays Active and No Penalties: With regular filings, LLPs are not declared as defunct, and stays active. Also, annual compliance filings are mandatory and hence involve penalties (additional fees) to LLPs, when they default on filings.
- Conversion or Closure: Regular annual compliance filings facilitate easier conversion of Limited Liability Partnerships into other types of companies, as well as quicker resolutions in case of dissolution of partnerships.
Checklist Items for LLP Annual Filing Compliances
- 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.
Important Requirements of LLP Annual Filing Compliance
Maintain Discipline For businesses to meet their annual compliance requirements, all it requires is for them to remain disciplined and vigilant. However, being callous can result in hefty fines and penalties. No to mention, LLPs that meet annual compliance requirements are often granted loans quicker or readily funded by investors, as these businesses are compliant with the requirements of the Registrar of Companies (RoC).
Regular Updates From The RoC (Registrar Of Companies) With an on-call company secretary throughout the year, you can ensure that your business is run in accordance with the laws in force. Our team would keep you up-to-date on all the changes made by the RoC, throughout the year.
Late Fees for LLP Form 8 and LLP Form 11 Filing
If an LLP fails to submit its annual filing forms within the prescribed due date, a penalty of ₹100 per day per form will be applicable.
The penalty starts from the actual due date and continues until the return is filed.
The Designated Partners of an LLP are responsible for maintaining proper books of accounts and filing annual returns with the Ministry of Corporate Affairs (MCA).
LLPs should file LLP Form 8 and LLP Form 11 before the due dates prescribed by MCA to avoid penalties.
Filing and Audit Requirement Under Income Tax Act
Taxpayers are required to file Income Tax Returns (ITR) every year declaring income, deductions and tax liabilities.
The due date for filing Income Tax Returns is generally 31st July of the relevant assessment year unless extended.
Tax audit may be required if turnover or gross receipts exceed prescribed limits.
As per the Limited Liability Partnership Act, 2008, LLPs with turnover above ₹40 lakh or contribution above ₹25 lakh are required to get their accounts audited by a practicing Chartered Accountant.
LLPs required to conduct audit must file their Income Tax Return by 30th September.
LLPs engaged in specified domestic or international transactions with associated enterprises are required to file Form 3CEB certified by a practicing Chartered Accountant.
The due date for filing returns in such cases is 30th November.
LLPs are required to file Form ITR-5 electronically through the Income Tax portal using the digital signature of the designated partner.
Documents Required for LLP Annual Filing Compliance
LLPs are required to maintain proper compliance documents for annual filing under the LLP Act and Income Tax Act.
Form 8 LLP
LLP Form 8 must be filed within 30 days after completion of 6 months from the end of the financial year.
The form must be digitally signed by two designated partners.
The form should also be certified by a Company Secretary, Chartered Accountant, or Cost Accountant.
Part A
Statement of Solvency
Part B
Statement of Income & Expenditure and Statement of Accounts
A penalty of ₹100 per day will be charged for late filing of Form 8.
Form 11 LLP
LLP Form 11 contains details of designated partners, body corporates as partners, contribution received and summary of all partners.
All LLPs are required to file Form 11 within 60 days from the end of the financial year.
LLP Form 11 should generally be filed on or before 30th May every year.
LLPs cannot be closed or wound up unless all annual returns are filed.
Timely filing of annual returns helps LLPs avoid heavy penalties and legal complications.
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| Form Type | Described | Due date | To be filed with |
|---|---|---|---|
| Form-8 | Filing of Statement of Accounts | 30th October | Registrar of Companies |
| Form-11 | Filing of Annual Returns | 30th May | Registrar of Companies |
| ITR -5 | Income tax return | 31st July (or 30th September, if tax audit is mandatory) | Income tax department |
| Audit | Tax Audit (only if applicable) | 30th September | Income tax department |
Major LLP Annual Filing Compliances
Important annual compliance requirements every LLP must follow to avoid penalties, maintain legal status, and ensure smooth business operations.
MCA Form 8
LLPs are required to file Form 8 before 30th October every year. It contains details regarding the Statement of Accounts and Solvency and must be filed annually.
MCA Form 11
LLPs must file Form 11 before 30th May every year. This form contains details of designated partners and changes in LLP management structure.
Income Tax Return
Every LLP must file Income Tax Returns annually irrespective of transactions. The due date is 31st July or 30th September depending upon audit applicability.
Accounting
Proper accounting is essential for audit, annual filing and tax return compliance. Balance sheet and profit & loss statements should be maintained accurately.
Audit Under IT Act
LLPs with turnover exceeding INR 2 Crore (business) or INR 50 Lakh (profession) must conduct tax audit under Section 44AB of the Income Tax Act.
AMT Audit
LLPs covered under AMT provisions must obtain Form 29C certified by a Practicing Chartered Accountant confirming AMT compliance.
