Annual Compliances of LLP- Online Process
Limited Liability Partnerships (LLPs) in India have become a popular form of business structure, offering the benefits of both a partnership and a company. LLPs combine the flexibility of a partnership with the advantages of limited liability, making them an attractive option for many businesses. However, like any other legal entity, LLPs are required to comply with certain annual compliance requirements to maintain their legal status and avoid penalties.
As per the provision of Income Tax Act, Limited Liability Partnership registered in India are required file income tax return each year in addition to MCA annual return, LLP must also file income tax return irrespective of income, profit or loss.
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01.
Statement of Accounts and Solvency:Every LLP require to prepare and close books of financial year in Form-8. Due date of filing Form-8 is 30th October of each financial year. In Form-8 contain details of financial statement along with some declaration.
02.
Annual Return:Annual Return file in e-form each year with Ministry of Corporate affairs (MCA). Annual return of LLP filed in Form-11. Due date of filing annual return is 60 days of financial year.
Form 11 shall be digitally signed by two designated partners.
03.
DIR-3 KYC:Each designated partner of LLP require to file DIR-3 eKYC each year, on or before 30th September.
04.
Audit:Audit on LLP is depending upon the threshold limit of turnover, contribution of LLP.
If LLP whose annual turnover Rs.40 lakh or contribution exceed Rs.25 lakh mandatory to conduct audit of LLP.
05.
Income tax return:LLP has to file Income Tax Return every year. Date of filing return is depend upon the applicability of audit or not. If tax audit is mandatory then file income tax return by 30th September, otherwise 31st july every year.
Due date of annual compliances of Limited Liability Partnership:
1.Due date of income tax return:
Income tax return filing due date as per section 139 of Income tax act is 31st July of assessment year if LLP is not required to accounts get audited u/s 44AB. If LLP is required to get the accounts audited u/s 44AB, the due date of ITR shall be 30th September of the Assessment Year. In this case Partner of LLP get benefited for filing of ITR as due date applicable on the individual who the partner of LLP which accounts get audited is also 30th September of the Assessment Year.
2.Due date of Form-8:
Limited Liability Partnership registered in India are required file Statement of Accounts & Solvency in Form 8 every year within 30 days from end of 30th September of close of financial year.
3.Due date of Form-11:
Limited Liability Partnership registered in India are required file Annual Returnin Form 11 every year and must include the details of designated partners and partner contribution. Therefore, LLP annual return is due on May 30th.
Initial Compliance Checklist for LLPs
- LLP Agreement Filing (Form 3):
Within 30 days of incorporation, partners must execute an LLP Agreement and submit it to the Registrar of Companies using LLP Form 3. - Opening a Bank Account:
It’s essential to open a Current Account in the LLP’s name at any Indian bank. All financial transactions on behalf of the LLP should be conducted through this bank account. - PAN & TAN Application:
The LLP must obtain a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) from the Income Tax Department. - GST Registration (if applicable):
GST registration is required if the LLP’s annual turnover exceeds ₹40 lakhs (₹20 lakhs for service providers). The LLP can apply for GST registration when it becomes necessary, rather than immediately after incorporation.
Consequences of Non-Compliance with LLP Requirements
- Persistent failure to comply with requirements may lead to the disqualification of the LLP’s designated partners.
- The ROC has the authority to strike off the name of the LLP from its register if the LLP fails to meet compliance requirements for a prolonged period. Once struck off, the LLP loses its legal status and cannot operate as a business entity.
- The ROC may initiate legal proceedings against the LLP and its partners for non-compliance.
- Non-compliance can harm the LLP’s reputation, making it difficult to secure loans, attract investors, or enter into contracts with third parties.
- An LLP that has not complied with ROC requirements may face complications during the winding-up process, including additional penalties and legal hurdles.
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