LLP COMPLIANCE & ANNUAL FILING
Every LLP has to file FORM-8, FORM-11 and ITR every year even if LLP has no income or incurred any loss during the financial year to avoid penalties. Start your LLP compliances today to avoid penalties.
Note:- For Tax Audit & Other compliances contact us for customized packages.
WHAT IS LLP COMPLIANCE & ANNUAL FILING
Limited Liability Partnership registration is done under the LLP Act, 2008. This Act is introduced by the central government in 2009 for small or medium enterprises, it gives many benefits to the partners of the LLP as it has the features of both companies registered under the companies act and partnership firm. LLP is a hybrid version of a company and partnership firm. Minimum 2 partners as required as a designated partner in the LLP but there is no limit for the maximum number of partners. The liabilities of the partners are limited, there is no minimum capital requirement to start the LLP, etc. there many other benefits in the LLP.
Once the LLP is registered there are certain responsibilities that are on the Designated Partners which they have to complete every year on time. LLP is registered with the MCA (Ministry of Corporate Affairs) through ROC (Registrar of Companies) therefore there are certain compliances which the LLP had to do regularly. If any LLP fails to do that there are many consequences which an LLP or its partners has to face like ROC will impose a penalty on LLP as well as on the partners of LLP or the ROC may strike off the name of the LLP.
In comparison to the companies, the LLP has fewer compliances requirement. But there are certain compliances it has to do every year like Designated Partner KYC, filing of financial statement and audit report to the ROC, filing of the statement of account of solvency to the ROC and filing of Income Tax return, Tax audit if applicable
Start your Limited Liability Partnership compliances today to avoid penalties because the charges for the compliances are always less than the penalties imposed by the ROC for non-compliance or delay in compliance. Register experts provide you with the complete LLP compliances services at a reasonable price, we always try to complete your compliances on time so that no penalty or fine will be leviable on you or your LLP, we help startups in their business by handling their legal formalities so that they can focus in the growth or development of their business.
MANDATORY LLP COMPLIANCE & ANNUAL FILING
Mandatory Compliances with their last date of filing
After getting the certificate of LLP incorporation following compliances has to be done by every LLP and its partners/ designated partners every year without any delay:
- Submission of initial LLP agreement: Once the LLP is registered and certificate is issued by the Registrar. The partners of the LLP have to submit the LLP agreement after getting it notarized on stamp paper within 30 days from the date of incorporation. The value stamp paper of the LLP depends upon the state of its registered office and the capital contribution of the LLP.
If there is a delay in filing the penalty of Rs. 100/- per day will be chargeable by the ROC.
- ROC filing: An LLP has to file its documents every year to the ROC within the specified time limit in requisite form along with relevant fees. The forms are:
- FORM-8: It is a form for submission of statement of Accounts and Solvency. It should be filed within six months from the end of every financial year along with the applicable fees. A financial year always ends on the 31st Of March of every year. This form contains the details of the assets and liabilities and income & expenditure statement of the LLP. It shall be signed by the two designated partners and the auditor (Chartered Accounted).
If there is any delay in filing of this form then there will be a penalty of Rs. 100/- per day
FORM-11: It consists of the annual return of the LLP. This form contains the details of the partners or designated partners, along with their contribution, business activity of the LLP, etc. This is signed by two designated partner of the LLP and submitted to the ROC 60 days from the end of the financial year means the last date of filing this form is 30th May of every year.
Rs. 100/- per day is the penalty amount charged by the ROC if there is any delay in filing this form.
Designated Partner KYC: All the Designated partners has to do the KYC every year in the form of DIR-3 KYC. In this form all the details of the partners are submitted to the ROC like their PAN details, Aadhaar Card details, Passport Details (if have), address, contact detail, etc. is filed. The last date of filing this form is 30th September of every year.
If KYC has not been done within the prescribed time then the ROC will deactivate the DPIN of that designated partner and for the activation of the DIN, there is a penalty of Rs. 5000/- per designated partner that has to be paid to the ROC.
- Income Tax Filing: LLP is a separate legal entity like a company and has to file its income tax return every year before 31st July and has to pay income tax @ 30% of its profit. The LLP is exempted from the tax audit if the turnover is less than Rs. 40 Lakhs or contribution less than 25 Lakhs and if tax audit is applicable on LLP then the last date of ITR is 30th September.
The ITR of LLP is filed in ITR-5 and in this, all the income and expenses statement needs to be filed to the income tax department. LLP has to pay a flat 30% of the profit and if the income exceeds 1 crore then in addition to the income tax 10% also has to pay as a surcharge.
The fine of the income tax return is Rs. 1000/- to Rs. 5000/- or such a higher amount as may be prescribed by the department.
- Book Keeping: All the LLPs has to maintain their books of accounts on a cash or accrual basis and other documents in the relevant format. These documents shall be kept in the registered office of the LLP. If the turnover of the LLP exceeds Rs. 40 lakhs or capital exceeds Rs. 25 lakhs then the books of accounts must be audited by the chartered account.
If any LLP doesn’t comply with the provision of the Act, rules or regulation made thereunder will be punishable with a fine, not less than Rs. 25,000/- which may extend to Rs. 5,00,000/-. And the designated partner will be punishable with a fine of Rs. 10,000/- which can be extended to Rs. 1,00,000/-.
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Frequently Asked Questions
The financial year of the LLP starts on the 1st of April and ends on the 31st of March. And if the LLP is incorporated after 1st April then the beginning of the financial starts with that date for the first financial year and the subsequent year it will again start from 1st April to 31st March.
For example: If an LLP incorporated on 5th May 2020 then its first financial year will be from 5th May 2020 to 31st March 2021 and the subsequent financial year will be from 1st April to 31st March.
Yes, every LLP has to do compliance every year within the specified time limit. Every LLP has to file FORM-8, FORM-11 and ITR every year even if LLP has no income or incurred any loss during the financial year to avoid penalties.
No, In LLP there is no need to appoint an auditor during its life but an LLP has to do the tax audit if its turnover is more than 40 Lakhs or capital contribution is more than 25 Lakhs.
If an LLP is incorporated on or before 30th September of the financial year, then the LLP has to close its financial year in upcoming 31st March, and if any LLP incorporated on or after 1st October then it can complete its first financial year either in the upcoming or next 31st March. The LLP gets 18 months for filing its first-year compliance.
For every delay in filing of any form to the ROC within the prescribed time limit then there is a basic penalty of Rs. 100/- per day per form and for Non-KYC there is a flat Rs. 5000/- per designated partner will be chargeable.