Statutory compliance checklist for LLP companies

Last Updated at: January 08, 2020
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Statutory compliance checklist for LLP companies

Running any business, for instance, LLP, OPC, Private Limited, is not so easy. Investment of money, time and determination are highly required. There are formalities, registration efforts, GST filings and lots more which can make your head spin. We, at Vakilsearch, will help you with all legal ways, like, filing all the mandatory forms, suggesting you a lawyer or verifying your documents. Vakilsearch helps you to avoid penalties for not filing the required forms on time.

What is an LLP?

Limited Liability Partnership (LLP) is a separate legal entity registered under the Ministry of Corporate Affairs (MCAs) in India. For registering into an LLP, there should be at least two persons as partners where compulsorily one has to be an Indian citizen and resident. The partners in an LLP should take responsibility for maintaining a proper book of accounts, filing an Income Tax Return and filing an annual return with the Ministry of Corporate Affairs (MCA) on every financial year.

Advantages of Limited Liability Partnership:

  • In an LLP, one partner is not answerable or liable for another partner’s misconduct or negligence.
  • The partners of an LLP have the right to manage the business directly.
  • An LLP provides limited liability protection for the owners.
  • If the number of Partners reduces less than 2, the sole partner can still find a new Partner to fill the position.
  • Post incorporation, an LLP can have limitless partners.
  • If there is only one partner in an LLP, there is time to find a new one, without dissolution of the LLP.
  • It is a separate legal entity.
  • LLPs have assets and liabilities that are separate from that of the promoters.
  • An LLP can raise funds from Partners, Banks and NBFCs.

All LLPs registered in India with the Ministry of Corporate Affairs (MCA) need Statement of Accounts and Annual Returns on each Financial Year. Though the LLP has done business or achieved profit, it is mandatory for an LLP to file a return. There is three compulsory compliance when you own an LLP.

  1. Filing of Annual Return
  2. Books of Account
  3. Filing of Income Tax Returns

Register Your LLP Now

  1. Annual Return Filing:

In LLP, a person should file two types of MCA annual return each financial year. The two forms are Form 8 and Form 11.

Form 8

Form 8 consist of the statement of Account and Solvency. You should file Form 8 along with the fee, within 30 days from the end of six months of the financial year. Year ending for LLPs is 31st March of each year. Two designated partners must sign the form digitally. Further, it must be certified by a chartered accountant, auditor or the accountant of the company. Form 8 consists of information related to the statement of assets of the LLP and liabilities and statement of income and expenditure of the LLP.

There are two types in Form 8. They are:

  • Part A – Statement of Solvency
  • Part B – Statement of Accounts, Statement of Income & Expenditure

You will have to pay the penalty of Rs.100/day if you have not filed this form.

Form 11

Form 11 consist of annual return. The form should contain the complete details of all the partners, their contributions towards the company, etc. You should file Form 8 along with the fee, within 60 days of the financial year. Year ending for LLPs is 31st March of each year. Therefore, LLPs have to file the LLP Form 11 on or before 30th May every year.

Remember that you should pay the penalty if you don’t file LLP Annual Return on or before the due date.

  1. Filing of Income-tax:

You have to file the Income-tax for your LLP whose turnover is more than Rs.40 lakhs or whose capital is more than Rs.25 Lakhs have to get the books of account audited by a Chartered Accountant. The deadline to file the tax return for an LLP which is required to get his books verified & reviewed is 30th September. For LLPs where tax audit is not expected deadline, the due date for filing the tax is 31st July.

Limited Liability Partnerships (LLPs) which are required to file Form 3CEB (LLPs which have entered into international transactions) can do their tax filing by 30th November. LLPs should file their income tax return in Form ITR 5. The form could be submitted online via the income tax website with the help of the selected partner’s digital signature. LLP tax payment can be made in physical mode through chosen banks or e-payment mode.

  1. Books of Account:

All LLPs must maintain proper books of account on a cash basis or accrual basis. Each year, before 31st March, the report has to be adequately submitted when required. The accounts books have to be presented in the registered office when needed. In case of LLPs with a turnover of more than Rs.40 lakhs or capital of over Rs.25 lakhs, the accounts must be audited by a Chartered Accountant.

Any LLPs that does not obey the establishment of the Act can be punishable with a fine of minimum Rs.25,000 and to a maximum of Rs.5,00,000. Further, the designated partner could be punished with a penalty of Rs.10,000 and Rs.1 Lakh for non-acquiescence.

 

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Statutory compliance checklist for LLP companies

2327

Running any business, for instance, LLP, OPC, Private Limited, is not so easy. Investment of money, time and determination are highly required. There are formalities, registration efforts, GST filings and lots more which can make your head spin. We, at Vakilsearch, will help you with all legal ways, like, filing all the mandatory forms, suggesting you a lawyer or verifying your documents. Vakilsearch helps you to avoid penalties for not filing the required forms on time.

What is an LLP?

Limited Liability Partnership (LLP) is a separate legal entity registered under the Ministry of Corporate Affairs (MCAs) in India. For registering into an LLP, there should be at least two persons as partners where compulsorily one has to be an Indian citizen and resident. The partners in an LLP should take responsibility for maintaining a proper book of accounts, filing an Income Tax Return and filing an annual return with the Ministry of Corporate Affairs (MCA) on every financial year.

Advantages of Limited Liability Partnership:

  • In an LLP, one partner is not answerable or liable for another partner’s misconduct or negligence.
  • The partners of an LLP have the right to manage the business directly.
  • An LLP provides limited liability protection for the owners.
  • If the number of Partners reduces less than 2, the sole partner can still find a new Partner to fill the position.
  • Post incorporation, an LLP can have limitless partners.
  • If there is only one partner in an LLP, there is time to find a new one, without dissolution of the LLP.
  • It is a separate legal entity.
  • LLPs have assets and liabilities that are separate from that of the promoters.
  • An LLP can raise funds from Partners, Banks and NBFCs.

All LLPs registered in India with the Ministry of Corporate Affairs (MCA) need Statement of Accounts and Annual Returns on each Financial Year. Though the LLP has done business or achieved profit, it is mandatory for an LLP to file a return. There is three compulsory compliance when you own an LLP.

  1. Filing of Annual Return
  2. Books of Account
  3. Filing of Income Tax Returns

Register Your LLP Now

  1. Annual Return Filing:

In LLP, a person should file two types of MCA annual return each financial year. The two forms are Form 8 and Form 11.

Form 8

Form 8 consist of the statement of Account and Solvency. You should file Form 8 along with the fee, within 30 days from the end of six months of the financial year. Year ending for LLPs is 31st March of each year. Two designated partners must sign the form digitally. Further, it must be certified by a chartered accountant, auditor or the accountant of the company. Form 8 consists of information related to the statement of assets of the LLP and liabilities and statement of income and expenditure of the LLP.

There are two types in Form 8. They are:

  • Part A – Statement of Solvency
  • Part B – Statement of Accounts, Statement of Income & Expenditure

You will have to pay the penalty of Rs.100/day if you have not filed this form.

Form 11

Form 11 consist of annual return. The form should contain the complete details of all the partners, their contributions towards the company, etc. You should file Form 8 along with the fee, within 60 days of the financial year. Year ending for LLPs is 31st March of each year. Therefore, LLPs have to file the LLP Form 11 on or before 30th May every year.

Remember that you should pay the penalty if you don’t file LLP Annual Return on or before the due date.

  1. Filing of Income-tax:

You have to file the Income-tax for your LLP whose turnover is more than Rs.40 lakhs or whose capital is more than Rs.25 Lakhs have to get the books of account audited by a Chartered Accountant. The deadline to file the tax return for an LLP which is required to get his books verified & reviewed is 30th September. For LLPs where tax audit is not expected deadline, the due date for filing the tax is 31st July.

Limited Liability Partnerships (LLPs) which are required to file Form 3CEB (LLPs which have entered into international transactions) can do their tax filing by 30th November. LLPs should file their income tax return in Form ITR 5. The form could be submitted online via the income tax website with the help of the selected partner’s digital signature. LLP tax payment can be made in physical mode through chosen banks or e-payment mode.

  1. Books of Account:

All LLPs must maintain proper books of account on a cash basis or accrual basis. Each year, before 31st March, the report has to be adequately submitted when required. The accounts books have to be presented in the registered office when needed. In case of LLPs with a turnover of more than Rs.40 lakhs or capital of over Rs.25 lakhs, the accounts must be audited by a Chartered Accountant.

Any LLPs that does not obey the establishment of the Act can be punishable with a fine of minimum Rs.25,000 and to a maximum of Rs.5,00,000. Further, the designated partner could be punished with a penalty of Rs.10,000 and Rs.1 Lakh for non-acquiescence.

 

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