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ANNUAL COMPLIANCE FOR LLP FIRM
In order to maintain the reputation of your LLP Company, following are the mandatory Statutory Annual for LLP which must be filed so as to avoid heavy penalties.
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Annual Compliance for LLP
UNDERSTAND LLP Compliance cost !
Running an LLP Company while adhering to all necessary regulations is just as important as the registration of LLP. To increase transparency, all registered LLP in India with the Ministry of Corporate Affairs are required to follow all necessary compliances. Compliances for LLP after incorporation are determined by the business activity. All partners have the responsibility of ensuring that all necessary annual compliances for LLP are met.
What exactly is an LLP?
LLP is an abbreviation for Limited Liability Partnership. A Limited Liability Partnership registration is a type of business entity that offers the benefits of a company’s limited liability as well as the Partnership’s flexibility. It is treated as a distinct legal entity. The Limited Liability Partnership Act of 2008 governs LLPs. An LLP’s partners are not liable for the other partner’s unauthorised actions, and each partner’s liability is limited to his capital stake.
A Limited Liability Partnership Firm in short an LLP is a hybrid of a corporation company and a partnership firm in which the partners act as agents for the company but are not legally bound by anything they do.
An LLP’s Structure and Key Features
An LLP’s structure and key features are as follows:
1. An LLP’s structure is a separate legal entity with a perpetual succession.
2. The LLP is governed by the Limited Liability Partnership Act of 2008.
3. A minimum of two Designated Partners are required to form an LLP.
4. The Ministry of Corporate Affairs oversees the operation of LLPs.
5. After forming an LLP, it can engage in any trade or business.
6. An LLP’s partners are treated as agents, but they are not liable for any liability incurred by a partner.
7. Except in cases of fraud and negligence, the partners’ liability is limited to their share of the capital.
8. The assets and liabilities of an LLP firm are separate from those of its partners.
TAX COMPLIANCE FOR LLP AFTER INCORPORATION
COMPLIANCE FOR LLP COMPANY
There are some one-time compliances in addition to the annual compliance for LLP. Following the registration of an LLP, it must adhere to the following requirements:
1- The LLP must execute and file the LLP Agreement with the Ministry of Corporate Affairs within 30 days of incorporation, in accordance with Sections 2(O) & (q), 22, and 23 of the LLP Act, 2008.
According to the LLP Act, if no Agreement is filed, the mutual rights and liabilities shall be as set forth in Schedule I to the Act. As a result, if an LLP wishes to exclude any or all provisions or requirements of Schedule I to the Act, it must execute and file an LLP Agreement specifically excluding the applicability of any or all provisions that are mentioned in Schedule I.
Penalty: Failure to file the Agreement within the specified time frame will result in a fine of Rs. 100 per day of delay, with no upper limit.
2- Aside from the aforementioned, the LLP must apply for an LLP company’s PAN and TAN.
3- Open a Limited Liability Partnership (LLP) bank account.
4- After you’ve incorporated, get the LLP seal and LLP stationery made.
ANNUAL FILINGS FOR LIMITED LIABILITY PARTNERSHIP (LLP)
WHY FILE COMPLIANCES FOR LLP ?
The income tax compliance for LLP (Limited Liability Partnership) should be filed on a regular basis to avoid heavy penalties under the law for non-compliance. When compared to the yearly compliance requirements imposed on private limited companies, an LLP has only a few statutory compliance to follow each year. However, the penalties in case of non-filing or after the LLP Compliance due date, appears to be quite substantial. Taking an example of non-compliance for Private Ltd Company, the fine can be upto Rs. 1 Lakh, where as in case of an LLP Non- Compliance, the fine can be upto Rs. 5 Lakh.
LLP COMPLIANCE DATES
IMPORTANT DATES FOR COMPLIANCE OF LLP
In order to avoid the LLP Compliance Penalty, make sure you file the below mentioned forms before the LLP Compliance due dates:
LLP Compliance Due Date
LLP Compliance Checklist
FORM 8 ACCOUNTS
Details about the profit made, along with other financial data.
FORM 11 (Annual return)
Summary of management affairs along with partners’ details.
INCOME TAX RETURN
Applicable for LLPs not required to do Tax Audit.
INCOME TAX RETURNS
Applicable for LLPs required to do Tax Audits.
DOCUMENTS REQUIRED FOR roc filing OF LLP
FOR SMOOTH COMPLIANCE FOR LLP COMPANY
Below is the list of documents required for the annual tax compliances for LLP. Make sure you have these documents ready while filing statutory compliances for LLP in India:
a) LLP Information such as Certificate of Incorporation and PAN Card, Income
b) The LLP Agreement, as well as any supplementary agreements, if any.
c) Financial Statement of LLP that must be duly signed by all of the Designated Partners.
d) Digital Signature Certificate (DSC) is required for all Designated Partners of the LLP.
Every financial year, all LLPs registered with the MCA must file a statement of accounts and annual returns. It is still necessary to file a return whether or not the LLP has done business or made a profit. After the incorporation of an LLP, you must comply with these three requirements.
1- Annual returns must be filed.
2- Accounts books.
3- Filing of income tax returns.
LLP COMPLIANCE CHECKLIST
STATUTORY ANNUAL COMPLIANCE FOR LLP LIST
Every financial year, a person in an LLP should file two types of MCA annual returns. DIR-3 KYC, Forms 8 and 11 are the three forms available. Check out the LLP Compliance Checklist:
DIR 3 KYC or DIN KYC form is required to be filed every year after 31st of March. Through DIR 3 KYC, the MCA department is intimated that all the Directors or Partners holding a valid DIN/ DPIN are active and are currently associated with the LLP. For the 1st year, DIR-3 KYC Form is to be filed along with PAN & Aadhar Card to be attached and Email & Mobile Form is to be verified. From 2nd year onwards, Web DIR-3 eKYC need to be submitted on MCA Portal. This is one of the mandatory compliances for LLP after incorporation. In case of non-filing of the DIR 3 KYC, a penalty of Rs. 5000 per director will be fined.
Form 8 | Compliance for LLP
The statements of account and solvency make up Form 8. Within 30 days of the end of the fiscal year’s first six months, i.e. October 30, one must file Form 8 along with the fee.
It is important to note that the LLP Compliance due date for filing Form 8 is 30th Oct every year.
The LLP Compliance government fee is determined on the basis of the Capital Contribution by its partners and is divided accordingly.
Contribution of LLP
Filling Fees of Form-8
Up to Rs. 1 Lakh
Rs. 100001 to Rs. 500000
Rs. 500001 to Rs. 10 lakhs
Rs. 10 Lakhs above
The form needs to be digitally signed by the designated partners and must be certified by a Chartered Accountant, an Auditor, or the Company’s Accountant. The information in Form 8 is related to the assets and liabilities of the Limited Lability Partnership Firm, as well as its income and expenditure statements.
Form 8 is divided into two types. They are as follows:
Part A – Solvency declaration.
Part B consists of a statement of accounts as well as a statement of income and expenditure (Balance Sheet, Profit & Loss Account).
If you have not filed this form, you will be fined Rs.100 per day.
Form 11 | Compliance for LLP
Annual returns are submitted on Form 11. The form should include all of the partners’ contact information, as well as their financial contributions to the business. Within 60 days of the end of the fiscal year, you must submit Form 8 along with the fee. LLPs have a fiscal year that ends on March 31st of each year. As a result, LLPs must file the LLP Form 11 by the 30th of May each year.
Remember that if you do not file your LLP annual returns on or before the due date, you will be penalised.
Tax Compliance for LLP
For any LLP with a turnover of more than 40 lakhs or capital of more than 25 lakhs, you must file income tax compliance for LLP.
Limited liability partnerships (LLPs) that need to file Form 3CEB (LLPs that have transacted internationally) can do so by November 30. Form ITR 5 is the form that LLPs should use to file their tax returns. With the help of the digital signature of the selected partner, the form could be submitted online via the income tax website. LLP tax payments can be made in either a physical or an electronic format through various banks.
Accounts books | Annual Compliance for LLP
A proper book of Accounts must be kept on a cash basis or accrual basis for an LLP firm. The account books report must be properly submitted on or before 31st March of each year. When the accounts books are needed, they must be presented to the registered office. A chartered accountant must audit the accounts of LLPs with a turnover of more than 40 lakhs or capital of more than 25 lakhs.
Any LLP that fails to comply with the Act’s requirements could face a fine of up to Rs. 5,000,000. In addition, non-filing could result in a penalty ranging between Rs. 10,000 and Rs. 1 lakh for the designated partner.
BENEFITS OF FILING COMPLIANCE FOR LLP
ANNUAL COMPLIANCE FILING FOR LLP ON TIME !
The public reputation increases if the annual compliances for LLP are filed accordingly with the Registrar of Companies and the Ministry of Corporate Affairs. More investors would be willing to put their money into an LLP that follows the law’s rules.
2. Lessening the burdens
It can be detrimental to the LLP’s development if compliances are not followed up on or filed. As a result, it is critical that the LLP’s partners comply with all compliance requirements.
3. Foreign Direct Investment (FDI)
The Indian government recently released guidelines for foreign direct investment in limited liability partnerships (LLPs). Foreign investors are more likely to invest in LLPs if they comply with the authorities’ requirements. The automatic route and the approval route are both available for FDI in an LLP. The LLP can increase its capital by making such an investment.
WHY VAKILGIRI ?
VAKILGIRI AS YOUR COMPLIANCE EXPERTS !!
Vakilgiri Legal Consultants is a group of experts consisting of highly qualified Chartered Accountants, Company Secretaries, Advocates and Business Administrators. Vakilgiri will help you in completing your Statutory Annual Compliances for the LLP and will ensure that the process is smooth. Our team will brief you about the forms and compliances that needs to be filed so as to avoid the penalty. With Vakilgiri, you just need to focus on your business operations. Rest all is taken care of by our experts.
We offer one stop and quick Legal solutions related to company incorporations like Section 8 NGO Registration, Private Limited Company Registration, LLP Firm Registration, Nidhi Company Registration, Section 8 Microfinance Company registrations and all such business entity incorporation process. Apart from these, we will also guide you in maintaining and completing annual compliances related to the above mentioned legal entities. With a clientele of 5000+ entities, our team will support quick and reliable guidance to boost your business.
Contact us at 9525665852 or mail us at email@example.com to know more about our services.
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