LLP Compliance Checklist

Introduction

Periodically filing returns along with the LLP compliance checklist and statutory compliance is necessary for limited liability partnerships (LLPs) to maintain compliance and prevent potential fines for noncompliance. 

Nevertheless, keep in mind that an LLP compliance checklist has fewer annual compliance requirements than a private limited company and that failure to comply may result in steep fines.

What are LLP (Second Amendment) Rules, 2022?

The LLP (Second Amendment) Rules, 2022 have brought about several significant amendments, including the following:

1. During incorporation, there can be five partners instead of two designated partners (without a DIN).
2. Limited Liability Partnerships will receive their TAN and PAN in addition to the Certificate of Incorporation (COI).
3. A web-based Form-9 must be completed to file the Consent of Partners.
4. The LLP’s interim resolution professional must now sign the Statement of Account & Solvency on the LLP’s behalf.
5. All LLP forms are now web-based or online-based.

LLP Annual Compliance: What Is It?

LLP statutory compliance and LLP annual compliance consists of legal and regulatory obligations that must be satisfied annually. In consequence, the Limited Liability Partnership Act of 2008 mandates specific duties. 

There could be severe fines, taxes, and penalties for breaking these rules. You even have filings and actions under this that must be completed in a certain amount of time. 

In India, an LLP (Limited Liability Partnership) business must file its annual return within sixty days after the end of the fiscal year to stay in compliance and avoid paying a steep fine for noncompliance. 

Additionally, within 30 days after the conclusion of the sixth month of the financial year, a Statement of Account & Solvency must be submitted. LLP’s annual compliance in India is required to maintain its fiscal year from April 1 to March 31. 

What paperwork is needed to file the LLP Annual Compliances?

You must provide a particular document set with your LLP company’s annual compliance filing. They’re as follows:

1. Bank statements covering all bank accounts opened in the LLP’s name between April 1 and March 31.
2. Credit card statements if the partners have paid any costs on the company’s behalf.
3. Invoices for sales and purchases during the year
4. An invoice for the costs incurred in a particular year.
5. Returns for GST, VAT, and additional taxes (when required)
6. Submission of TDS and challan deposits if applicable.

LLP’s One-Time Mandatory Compliance

LLP Form-3

Within 30 days of LLP Incorporation, the LLP Partners must create an LLP Agreement and file a copy of LLP Form-3 with the Registrar of Companies (ROC).

Opening a Bank Account

With any Indian bank, a current bank account must be opened in the Limited Liability Partnership’s name. 

The LLP Bank Account should be the only method used for all transactions under the LLP Name.

PAN and TAN Number

The Income Tax Department in India is the source of PAN and TAN numbers for all Limited Liability Partnerships. 

The same will now be assigned with the Certificate of Incorporation itself according to the LLP (Second Amendment) Rules, 2022.

GST Registration

By the GST Act and Rules, any business or entity with an annual turnover of more than Rs. 40 lakhs (or Rs. 20 lakhs for service providers) must obtain GST Registration. 

After LLP Incorporation, obtaining GST promptly is not required. When necessary, the Limited Liability Partnership may get the Registration.

LLP’s Annual Compliance

Accounts Statement and Solvency in LLP Form-8

All Limited Liability Partnerships must prepare and close their accounts by March 31 each year. At least two partners must file Form-8 with the Registrar within thirty days of the F.Y. (financial year) ending. 

Its interim resolution expert may now sign the Statement of Account & Solvency on behalf of the Limited Liability Partnership.

Form-11, the Annual Return, summarises all of the Partners’ information, including any changes to the LLP Management. Within 60 days after the financial year’s end, it must be submitted in Form-11 to the Registrar.

Income Tax (I.T.) Return

Each Limited Liability Partnership must file an I.T. Return annually, and the deadline for submitting an ITR Return is July 31. However, LLPs subject to a tax audit must file their I.T. returns by September 30.

DIR-3 KYC

By September 30 of every year, at the latest, each designated partner in a limited liability partnership must file Form DIR-3 KYC.

Audit

Limited Liability Partnerships must have their accounts audited if their annual turnover exceeds Rs. 40 lakhs or their contribution exceeds Rs. 25 lakhs.

India’s LLP Annual Compliance Checklist

The tasks on the LLP Annual Compliance Checklist are as follows:

1. Each financial year’s May 30 deadline for filing the LLP annual return must be met.
2. Each financial year’s LLP Account & Solvency must be submitted by October 30.
3. LLPs must file an income tax return annually regardless of income, profit, or loss.
4. Along with the requirements above, LLP must file income tax and GST returns by MCA norms. 

LLP penalties for noncompliance

In India, an LLP business is required by law to adhere to compliance as an implicit duty. LLPs cannot function or be allowed to function without it. 

However, breaking the rules could result in severe fines or penalties, jeopardising financial stability. You should exercise caution and keep in mind the fees listed above that may be incurred in the event of noncompliance if you want to prevent the same.-

1. Up to 10,000 can be charged to the LLP and its partners, which can be increased to $5,000,000.
2. Schedule I of the Limited Liability Partnership Act of 2008 applies if a limited liability agreement is absent. 

Limited liability partners are required to complete e-forms 3 and 4 within 30 days of incorporation. If you don’t do this, you could be charged an extra Rs 100 daily.

The professionals at Lawgical Adda will help you get and prepare the required paperwork, obtain digital signatures, and guarantee certification by experts in the field. 

In addition to ensuring that fines are avoided and compliance is maintained, our streamlined method will free up your time so you can concentrate on your primary business operations, leaving the difficulties of documentation upkeep to us.

If you need assistance with Converting an LLP into a Private Limited Company, registering a Section 8 Company, Public Limited Company, or Private Limited Company, or need assistance with checking company name availability,reach out to Lawgical Adda for expert guidance. Contact us today!