Limited Liability Partnership Annual Return

A limited liability partnership (LLP) can be described as a business entity that shares the characteristics of a partnership company and those of a corporation. They are regulated with the help of the

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Basic overview

Overview of Limited liability partnership (LLP) Company

A limited liability partnership (LLP) can be described as a business entity that shares the characteristics of a partnership company and those of a corporation. They are regulated with the help of the Registrar of Companies, Ministry of Corporate Affairs. LLP is a legal entity that is distinct from its owners and has perpetual succession. A few of the main advantages and rights that are enjoyed by LLPs include:

  • Separate legal entity.
  • Buy, Sell, and hold immovable and movable tangible or intangible assets.
  • Suitability and the right to be accused of being
  • The ability to open a bank account.
  • Possibilities to employ people.
  • The power to sign all kinds of contracts is legal.

As per the authority, all LLPs must maintain compliance and submit certain statutory filings with the Government every year. We look at the most important compliance requirements that apply to an LLP.

Books of Account All LLPs are required to maintain appropriate books of accounts for their businesses based on accrual or cash. The books of funds should be kept according to double-entry accounting within the company's registered office. For LLPs that have a capital value greater than Rs. 40 lakhs or a capital value greater than Rs. 25 lakhs, the books of accounts should be reviewed by a Chartered Accountant.

Any LLP not in compliance with the provisions of the Act could be punished with the payment of a fine of at least Rs. 25,00,000. The maximum fine is 5 lakh rupees. 5,00,000. Additionally, the designated partner is liable for penalties of Rs. 10,000 and Rs. 10,00,000 in cases of non-compliance.

Legal Compliance

Compliance is of the utmost importance in any business. Anyone interested can easily view the annual filing status on the MCA portal. Observation also plays an integral part in loan approvals or any other such applications and is an indicator of the credibility of organizations.

Maintain Active Status and Avoid penalties.

In the case of consecutive defaults in annual filings, an LLP could be declared defunct or given default status, and partners could even be displayed as defaulters and disqualified from further appointment in an LLP or company. Thus, annual return filing is necessary to maintain active status and avoid the heavy fees and penalties that would come their way.

Simple Conversion and Closure

Annual filing is paramount to easing conversion from an LLP into any other organization, as regular compliance records relax this task. Likewise, filing annual compliance records is equally vital in closing an LLP; even if non-operational at closure time, the Registrar may ask for annual compliance to be fulfilled along with additional LLP filing fees, should they apply.

Annual Return Filing of Limited liability partnership (LLP) Company

An LLP must submit two types of MCA annual returns every financial year, including Form 8 and Form 11.

Form 8 Form 11
Form 8 should be recorded 30 days before the end of a half year of the financial year, alongside a recommended expense. Two partners designated and verified by a chartered accountant, company secretary, or cost accountant must sign the form digitally. Form 8 consists of two sections: Form 11 provides details about the partnership number, the total number of partners, the total contribution made by each partner, the details of partner corporate bodies, and a summary of partners. All LLPs must complete the application within sixty days after the fiscal year's close and pay the prescribed fee. The due date for filing LLP 11 Form 11 is the 30th day of May every year.
Part A: Statement of Solvency
Part B: Explanation of Records, Proclamation of Pay, and Use

An LLP can only be wound down or shut down once all annual returns have been completed. Thus, filing your LLP Annual Returns by the deadline is crucial to staying clear of penalties.

Income Tax Return Filing

All LLPs registered in India must file income tax returns annually, regardless of revenues or profits. Thus, even an inactive LLP must file an income tax return without having conducted any transactions.

Maintenance of Documents

All LLPs must keep the incorporation documents, names of partners, and any changes made, as well as proof of payment for fees and a statement of account for the solvency and annual return that the LLP submits in the presence of the Registrar of the registered office of the LLP. These records must be readily accessible for inspection upon the request of any authorities.

Filing an Annual Return

Annual returns provide brief statements outlining changes in activities and management at the end of each financial year for an LLP, reporting any alterations in training and management as required. Each LLP was expected to file their Annual Return (known as Form 11) with their Registrar within 60 days after closing their books of accounts for a particular organization.

Filing Statements of Accounts

All Limited Liability Partnerships must use the Double Entry System when keeping their books of accounts. To submit their Statement of Accounts every year as of March 31, an LLP Form 8 is due with ROC on or before October 30 annually. Furthermore, those LLPs with an annual turnover exceeding Rs 40 lakh must get their financial accounts reviewed by an experienced Chartered Accountant annually.

Documents Needed for Annual Filing

  • PAN Card and Certificate of Incorporation for an LLP
  • The LLP Agreement (including any supplementary agreements)
  • Financial Statements
  • Financial Statements of an LLP signed off by its Designated Partners 1. The digital signature of all Designated Partners is mandatory.

What Are LLP Compliances?

Limited Liability Partnerships (LLPs) have experienced rapid growth since the introduction of the Companies Act 2013, allowing individuals to be freed from joint liability with their partners in an existing Partnership firm. With increased government regulations for traditional forms like corporations, more people opt for simpler forms like an LLP due to their easier compliance. Still, one must remain wary, as many Forms involve daily penalties.

What Are Advantages of LLP Compliances?

An LLP offers several advantages over Private Limited companies, such as

What Are My Audit Requirements for an LLP?

Audit requirements under the LLP Act state that only those LLPs with annual turnover or contributions exceeding Rs 40 Lakh or Rs 25 lakh, respectively, must have their accounts audited.

What Are the Income Tax Compliance Requirements of an LLP?

Income Tax Return: Each LLP must file its annual Income Tax Return by July 31. But those under tax audit should file by September 30. What is the significance of Annual Filing? essential for LLPs? LLP Annual Filing is mandatory for each LLP from the moment of incorporation. After the close of its first financial year, an LLP is required to submit both forms within the period. The annual compliance requirement is obligatory for each LLP, regardless of the volume of transactions, turnover, or commercial activities.

How much is the fine for not filing or delaying the annually filed compliance documents with LLP?

In the event of a filing delay, it is the LLP's responsibility. It is charged a government fee of Rs 100 per day for each day that it is delayed. Additionally, there is no maximum limit for an additional charge. In the event of continuous non-compliance with annual LLP compliance, The RoC could take the name of the LLP from its registry—also with extra costs. The penalty could also be assessed against the LLP and its associates.

Is the Audit of Financial Statements necessary to be filed for LLP RoC filing?

The books of accounts that have been audited are required for an LLP that falls within any of the following criteria: 1.) If the turnover of the LLP exceeds Rs. 40 lakh, or 2.) if the contribution total of the partners is greater than Rs. 25 Lakh. If LLP is not a part of any of the criteria mentioned above, the partner's signature will suffice.

What is the consequence of not filing Form 8?

Form 8 has to be completed by the end of October. In the case of late filing, you could face penalties of Rs. 100 per day for delay.

What are the details that must be included on Form 11?

Form 11 is the form that provides information about the partner and the contributions made. Furthermore, the LLP must disclose details about other businesses or LLPs whose partners are in the same position. The amount stated on Form 11 must align with the declaration on Form 8. Thus, it is important to fill out the form with care.

Who is required to sign Form 11?

If the total partner contribution is not more than Rs 5 crore or the partner's real gift is at most Rs 50 lakh, then the signatures from the designated partner are enough. But if the amount exceeds Rs. 5 million and the partner's contribution exceeds Rs. 50 lakh, Form 11 must be signed by a Company Secretary who is in full-time procedure.

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