A brief on LLP Compliance
The partners in an LLP must take the responsibility for maintaining a proper book of accounts, filing of Income Tax return, and submitting an annual return with the Ministry of Corporate Affairs on every financial year.
To continue the LLP business, the returns should be filed periodically for maintaining compliance and avoid substantial penalties under the law for non-compliance. Less compliance to be succeeded every year by an LLP as compared to a private limited company, but penalty rates are much higher for an LLP than a private limited company.
LLPs are not needed to audit their books of accounts except where their yearly turnover is more than INR 40 Lakh or if the investments or contribution to the company is more than 25 Lakh. Therefore, it is not compulsory for an LLP to audit its books of accounts if they are under the threshold parameters.
List of Compliances to be carried out by an LLP
LLP has a number of compliance, but some of the annual filings are mandatory whether the LLP has begun any business or not. The general list of annual compliance for a Limited Liability Partnership is as follows:
Preparation of Books of Accounts: Books of accounts to be prepared that includes statements of accounts and solvency. The statement of accounts and solvency to be filed in Form 8 attested by the digital signatures of designated partners.
Preparation of Financial Statements: This includes preparation of general purpose financial statements like balance sheet, income statement, statement of profit and loss and statement of cash flows.
Audit by Independent Auditor: Statutory audits performed by qualified auditors are conducted in order to report the state of finances and accounts of an LLP to the MCA.
Annual ROC Return Filings: Limited Liability Partnerships incorporated under LLP Act 2008 need to file the LLP Form 8 and LLP Form 11 to report financial statements with the Registrar of Companies.
Filing of Income Tax Return: LLPs those are applicable for tax audit are required to file their income tax return each year on or before 30th September. Others have to file till 31st July.
Maintenance of Statutory Registers: All Limited Liability Partnerships are required to maintain certain records about the company in the form of statutory registers.
Timeline and Applicable Penalties
- LLPs are required to file their statements of accounts and solvency within 30 days from the end of six months of the financial year. The statements of accounts and solvency are to be filed on or before 30th October of each fiscal year.
- Annual return in LLP Form 11 to be filed within 60 days from the end of the financial year. The annual return is due on 30th May every year.
- The last date for filing income tax returns for LLPs which does not require tax audit is July 31st each year and LLPs where tax audit is applicable, the last due date is September 30th each year.
For any noticeable delay in filing of Form -8 and Form 11, a penalty of Rs 100 per day per form will be applicable from the due date of filing of respective Forms.
Documents required for LLP Compliance
To prepare the complete compliance of an LLP, the following documents are required by us:
- PAN card, Certificate of Incorporation and LLP Agreement.
- LLP Identification Number
- Digital Signatures of Designated Partners.
- Details of Penalties imposed on the LLP, if any
- Registered office address of the LLP.
- Details of Designated Partners.
- Bank Statements of LLP current account/accounts
- Financial statements duly signed by Designated Partners.
- Contribution of Designated Partners.
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