LLP Compliances

LLP Compliances

Since the enactment of the Companies Act in 2013, Limited Liability Partnerships (LLP) have gained prominence as a business entity structure that exempts individual partners from the joint liability that is customary for partners in a partnership firm.

In India, every Limited Liability Partnership is obligated to comply with specific mandatory regulations established by the MCA for LLP. Lawgical Adda will guide you to understand them! 

Form 8

The statements of account and solvency comprise Form 8. It is necessary to submit Form 8, accompanied by the requisite fee, within 30 days commencing from the conclusion of the six-month fiscal year, specifically on October 30th. 

The fee is allocated proportionally to the revenue generated by your LLP. Two designated collaborators must digitally sign the form. Additionally, certification from a chartered accountant, auditor, or the company's accountant is required. The information on Form 8 pertains to the limited liability partnership (LLP) 's statement of assets and liabilities, as well as the statement of income and expenditure.

Form 8 Part A contains the following types: statements of solvency & Statement of accounts Statement of income and expenditures comprise Part B. Failing to submit this form will result in a daily penalty of 100 rupees.

Form 11

The annual returns comprise Form 11. The form ought to encompass comprehensive information regarding each associate, including their respective contributions to the organisation, among other things. Form 8 and the associated fee must be submitted within sixty days of the end of the fiscal year. LLPs complete their fiscal year on March 31 of each year. Consequently, LLPs must file Form 11 by May 30th each year at the latest.

Remember that failure to file LLP Annual Filing returns by the due date will result in a penalty.

Submission of Income Tax

LLPs exceeding ₹40 lakhs in turnover or ₹25 lakhs in capital are required to submit audited income tax returns, as certified by a chartered accountant. The due date for the LLP to submit its income tax return, which necessitates verifying and reviewing its records, is September 30th.

By November 30th, limited liability partnerships (LLPs) that have engaged in international transactions and are required to file Form 3CEB can complete their tax returns. LLPs should use Form ITR 5 to file income tax returns. The form may be electronically submitted through the income tax website, utilising the digital signature of the designated companion. Physical LLP tax payments may be submitted at select institutions, or electronic payments may be utilised.

Books of Accounts

All LLPs are required to uphold accurate accounting records, either on a cash or accrual basis. On or before March 31 of each year, the report must be submitted as required. When required, the accounts papers must be presented at the registered office. The financial statements of limited liability partnerships (LLPs) exceeding ₹40 lakhs in turnover or ₹25 lakhs in capital are subject to auditing by a chartered accountant.

Noncompliance of Limited Liability Partnership companies with the stipulations of the Act may result in a monetary penalty ranging from ₹25,000 minimum to ₹5,000 maximum. In addition, the designated companion may incur fines of ₹10,000 and ₹1 lakh, respectively, for disobedience.

Consequences or Penalties for Failure to File Forms 11 and 8

1. A daily penalty of Rs. 100 is imposed on LLPs until the filing is finalized. (Concurrently, for each form)

The government penalty fees amount to Rs. 2000 in total, which is as follows: If the Form 11/Form 8 of your LLP is not submitted by the designated due dates and the delay is 10 days for each form, the penalty fees will be as follows: "Rs. 1,000 for Form 11 (rating of Rs. 100 per day for ten days) and Rs. 1,000 for Form 8 (rating of Rs. 100 per day for ten days)"

2. Penalty ranging from Rs. 10,000 to Rs. 100,000 for Designated Partners

3. ROC is authorized to initiate legal proceedings (such as strike-off) and issue Notice to LLP.

Timeline for Compliance

The annual compliance agenda of the LLP comprises critical tasks that must be accomplished within designated timeframes:

Filing of the LLP Annual Return (Prior to May 30):

Annual returns must be filed by May 30 of each fiscal year in order to furnish a thorough account of the LLP's activities and financial condition.

Account and Solvency Filing for LLPs (Prior to October 30):

The LLP account and solvency statement, which detail the LLP's financial position and solvency throughout the fiscal year, must be submitted by October 30.

Filing of Required Income Tax Returns:

Regardless of their profit, loss, or income, LLPs are obligated to yearly submit an income tax return in order to comply with tax regulations.

Supplementary Compliance Obligations:

In addition to filing income tax returns and GST returns in accordance with MCA regulations, LLPs are required to complete an extensive array of mandatory compliance activities.

When is the LLP compliance checklist expected to be completed?

The LLP compliance document is typically due on October 30th of each fiscal year. This agenda comprises critical responsibilities such as submitting annual returns and financial statements, maintaining records in accordance with statutory obligations, and keeping the Ministry of Corporate Affairs informed of any necessary changes.

By what date must LLP compliance be completed?

Generally, the deadline for LLP compliance is October 30 of each fiscal year. During this time, limited liability partnerships (LLPs) are obligated to fulfil statutory obligations, file annual returns, maintain financial records, and maintain compliance with legal requirements, among other regulatory responsibilities.

Is submission of the charge details to the registrar's office required?

Filing charge details with the registrar's office is not obligatory; however, interested parties may choose to do so voluntarily.

Operating an enterprise takes a lot of work. It requires work, money, and resolve. In addition, there is a substantial amount of cumbersome documentation, including GST filings, registration, and others. Nevertheless, our team of legal professionals at Lawgical Adda will assist you with every legal obligation, including completing all required paperwork, recommending the most qualified attorney (should you require one), and authenticating your documents.