LLP Annual Compliance via Enterslice

A LLP or a Limited Liability Partnership is one in which the partners have limited liability like that of shareholders of a private limited company. It comprises components of a partnership firm as well as a corporation.  The LLP has a different legal entity that is separate from that of the partners. The Limited Liability Partnership is one of the recent entities introduced via the LLP Act, 2008. 

Post incorporation the LLP needs to file the following on a mandatory basis:-

a. File the LLP Agreement – this need to be filed with the MCA within 30 days of incorporation. In case of default, there is fine of Rs. 100 per day of default.

b. The LLP needs to buy two rubber rounded seals – one that bears the name of the LLP and the other with the LLP name along with the registered office address.

c. It is mandatory to open a bank account in the name of the LLP.

d. Apply online for LLP PAN Card.

Now let’s talk about the LLP Annual Compliances in brief. 

Mandatory LLP annual compliances

Every registered LLP has to comply with the following mandatory LLP annual compliances:-

1. File the Annual Returns with the Registrar of Companies – the LLP needs to file the annual return within 60 days of close of the financial year i.e. by 30th May of each year. It is basically a summary of the LLP’s Partners and indicates whether there is any change in the management of the LLP. This annual return can be filed through Form 11.  The penalty for default is Rs. 100 per day with no upper limit on the penalty.

2. File the Annual Accounts with the Registrar of companies – Registered LLP’s are mandatory required to maintain their Books of Accounts as per the Double Entry System. Using Form 8, the LLP’s are required to submit the financial details by 30th October of each year. There are two parts:-

• Part A for statement of Solvency

• Part B for the statement of income and expenditure and statement of accounts.

The penalty in this case too is a fine of Rs. 100 per day without any upper ceiling. For all LLPs whose annual turnover is more than Rs. 40 lakh per annum or whose contribution exceeds Rs. 25 lakh need to have their accounts audited by qualified Chartered Accountants.

3. File Income Tax returns – as per the Income Tax Act, each registered LLP is required to close their accounts at the end of each financial year i.e. 31st March every year. For LLPs whose annual turnover is more than Rs. 60 lakh or more need to get their accounts audited as per the Income Tax Act and file their returns latest by 30th September of each year. For LLPs whose accounts need not be audited under the law have to submit the returns by 31st July every year. 

The penalty for not filing the returns on time is Rs. 5000 if filed within 31st December and if not then it is liable to be charged Rs. 10000/-.