Annual Compliance for LLP Company
We know that Limited Liability Partnership (LLP) is an independent business body in which partners enjoy minimal liabilities. In short, that partner doesn’t have to pay loans and debt from their income, personal assets etc. Moreover, one partner is not accountable for the misdeed and fraud of the other partner.
LLP company registration happens as per the Limited Liability Partnership Act, 2008. There are essential annual compliances that an LLP company has to fulfill timely.
List of LLP Annual Compliance
Filing Account Statement and Solvency
LLP organization must maintain financial records and statements. They need to provide the entire information about the expenses, solvency, profit/loss account, assets, liabilities, earnings and expenses of LLP. All partners need to signed Form8, and a Chartered accountant or certified cost accountant must verify the details mentioned on the Form.
Form 8 must be submitted within one month from the closing of 6 months of the financial year by 30th October of every year.
The LLP that has exceeded the turnover of Rs 40 lakhs of those with a donation of Rs 25 lakhs and more must audit their book of accountants through a certified chartered accountant.
Yearly Return Filing
The LLP company must file an annual return with the Registrar of Companies
The LLP Form 11 is the recommended Form to fill the annual return
The yearly return must be filed before 2 months from the end of the financial year, in simple words, 30th May of every financial year
Income Tax Return Filing
It is mandatory for LLP organization to file Income tax returns online through Form ITR 5
According to the Income Tax Act, 1961, the closing date of the LLPs financial year is 31st March, so they need to file ITR before the closing date with the Income Tax Department.
LLPs which have surpassed the yearly turnover of Rs 60 lakhs must audit their account and submit their ITR by 30th September of each financial year.
LLPs that don’t need account auditing are required to file their ITR by 31st July every financial year.
If an LLP organization is involved in foreign financial transactions or has received a donation within its native country must file Form 3CEB. A qualified and certified Chartered accountant will verify the Form, and it must be filed by 30th November of every financial year.
MCA and ROC Compliances
Partners of LLP organizations need to participate and cooperate according to the needs of the LLP agreement. You can find such clauses, terms and regulations under the Limited Liability Partnership Act, 2008. Each partner needs to cooperate similarly.
It is obligatory for LLP organization to maintain its financial statements and records
according to the clauses of MCA and ROC.
Penalty provisions of non-compliances
- In case of not filing Income Tax Return
The LLP, which failed to file an Income Tax return on the due date, will have to pay Rs 5000 penalties; however, they need to do it before 31st December of every year. If the LLP doesn’t file the ITR on an extended due date, they must pay a 10,000 penalty.
- After company registration compliances
Other than LLP annual compliance, there are also some one-time compliances. A registered LLP need to follow compliances such as:
LLP organization need to daft, implement and submit the LLP agreement according to sections 2(O) & (q), 22 and 23 of the LLP Act, 2008 within one month of the registration with the MCA department. In the Agreement, responsibilities and rights are mentioned of the LLP partners.
If the Agreement is not submitted, the shared liabilities and rights will be according to Schedule I of the LLP Act. Therefore If LLP organization want leave requirements and clauses of Schedule I of the act, they must draft, implement and submit the Agreement with the MCA department.
- For MCA Filings:
Filing Form 11 and Form 8 is a compulsory need of each registered LLP according to the Limited Liability Partnership Act, 2008. Failing compliance fulfilment will cause a penalty. The company need to pay Rs 100 as a penalty each day for not filing any form. There is no upper limit set for that penalty amount.
If LLP Company is unsuccessful to submit the Agreement within a given deadline, they have to pay the fine of Rs 100 each day as a penalty with no clause of maximum limit
- Apart from the compliances mentioned above, the LLP Company must apply for LLP Tan and PAN
- They need to open a Bank account in the name of LLP
- They need to buy LLP seal
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