A Limited Liability Partnership is a separate legal entity. In order to preserve active status and to avoid default status. A regular filing with MCA is required to be taken care by all Limited Liability partnerships. Annual Compliance for any LLP is obligatory and unavoidable. Annual Compliance for LLP needs filing of two forms.
Statement of Accounts or financial statements
Filing LLP Annual Return
Annual return declares briefly in statements by reporting any change in activities and in management of the corporate for every financial year in coming years. Each LLP needed to file the Annual Return also known as Form 11 to the registrar within a span of 60 days after closing the books of accounts of the reputed organisation.
Filing Statements of Accounts
The Double Entry System is followed by all the LLP’s to maintain their Books of Accounts. In preparation of Statement of Accounts each year as on 31st March, LLP Form 8 is required to be deposited with the ROC on or before 30th October annually. Moreover, LLP’s whose yearly turnover exceeds Rs.40 lakh are required to get their financial accounts examined by an accomplished Chartered Accountant compulsorily.
Benefits of Annual Compliance
Convertibility and Settlement
Annual filing is very crucial for conversion of LLP into any other corporation. The records of annual compliance filed each year simplifies the process of conversion as well as the closure of organisation. Generally, the Registrar interrogates the fulfillment of Annual compliance with additional LLP fee before the conversion and settlement of the company.
The Ministry of Corporate Affairs declares the status of Annual compliance for LLP on it’s official portal. The ethics and moral of the company are dependent on the annual compliances.
While entering into contracts, companies can approach the forms filled by the LLP to introspect the financial worth of the company. The record of financial statements forms a picture of net worth in the minds of interested parties before entering into a contract.
Regular filing avoids penalties
With an intention to avoid heavy penalties and fees, regular filing of forms protects partners to be declared as defaulters. It also avoids further disqualification of contracts. Hence, LLP needs to fulfill the Annual Compliance requirements. The non-fulfillment of LLP Annual Compliance adds up in the form of heavy penalties till the actual date of filing.
The struggle in maintaining a business is real from setting up to the implementation.
All the filing and the documentation process should be taken care of. Compared to different companies LLP has fewer compliances and easy to acquire. Due to any reason if you fail to pay all the compliances on time a charge of Rs 100 will be added on a daily basis to the total amount. Thus the company should spend a good deal of resources in obeying the rules and regulations. Regular checkups of the amendments are significant as the law is very dynamic and changes from time to time.
Limited Liability Partnerships (LLP) are rising as far back as the presentation of the Companies Act, 2013 as it is a type of business substance, which enables individual partners to be liberated from the idea of joint liability of partners accomplices in an Patnership firm. Presently, as the Government is expanding the compliances and exposures for a Company type of structure, the greater part of the individuals are picking LLP type of business because of its basic and less perplexing compliances. Be that as it may, one must be cautious and genius dynamic about the compliances of LLP as a large portion of its Form includes every day punishment.
1. Exemptions from maintenance of Minutes book, Statutory Registers, and flexible tax rates etc.
2. No, AGM is not required for an LLP. AGM is a once in a year meeting for Shareholders of the Company. As there is no concept of shareholding in an LLP, no AGM is to be held.
3. Board meeting is generally associated with a Board of Directors meeting. There are no directors involved in an LLP, instead designated Partners run the business and are held responsible for compliances. Hence, Board of Partners meeting is suggested in case of an LLP firm.
4. There is no limit on maximum number of partners.
Registered LLPs with the Ministry of Corporate Affairs (MCA) needs to file the following mandatory compliance requirements :
I. Filing of Annual Return – LLP Form-11
II. Filing Statement of Account & Solvency – LLP Form-8
1. Filing LLP Annual Return Annual Return or Form 11 is a summary of an LLP’s Partners and indication of change in the management.
Every LLP is required to file Annual Return in Form 11 to the Registrar within 60 days of closer of financial year i.e. has to be filed on or before 30th May every year.
2. Filing of Statement of Account & Solvency (Filing of Annual Accounts/ Statement of Accounts/ Financial Statements/ P&L & Balance Sheet)
a) LLP must maintain proper books of account. The accounts may be on cash basis or accrual basis.
b) Statement of Solvency (Accounts) needs to be prepared every year ending on 31st March.
c) LLP Form – 8 should be filed with the Registrar of Companies on or before 30th October every year.
d) It should be noted that LLPs / FLLPs whose annual turnover exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to get their accounts audited by auditor of the LLP/ FLLP mandatorily.
|Sl. No.||E-Form||Due Date|
|1.||Annual Return (Form 11)||within 60 days of closer of financial year (For F.Y. 2018-19 due date is 30-05-2019)|
|2.||Statement of Account & Solvency (Form 8)||on or before 30th October every year (For F.Y. 2018-19 due date is 30-10-2019)|
LLP can file its return of income in ITR 5. it is mandatory for LLP to file return of income electronically under digital signature if its accounts are required to be audited under section 44AB.
|Sl. No.||Income Tax Return Particulars||Due Date|
|1.||In case Audit is not required (Those LLPs whose annual turnover does not exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to file their Income Tax. They are not required to get their accounts audited by their Auditor)||31st July of every year|
|2.||In Case Audit is required (Those LLPs whose annual turnover exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to file their Income Tax. They are required to get their books audited under the Income Tax Act.)||30th September of every year|
|3.||(LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant.)||30th November of every year|
1. For LLP per day penalty of Rs 100 till the filing is completed (Separately for both forms)
for example: If the Form 11/ Form 8 of your LLP is not filed within the due dates and suppose the delay is of 10 days for each form then the Government penalty fees will be Rs 2000 in total i.e. "Rs. 1,000 (i.e. @ Rs. 100 per day for 10 Days) for Form 11 & Rs. 1,000 (i.e. @ Rs. 100 per day for 10 Days) for Form 8"
2. For Designated Partner: From Rs. 10,000 to Rs. 100,000 Penalty
3. ROC can issue Notice to LLP and initiate legal proceedings (like strike off).
Yes, We can conver an existing partnership firm into LLP by complying with the Provisions of clause 58 and Schedule II of the LLP Act.
Yes, We can convert any existing private company or existing unlisted public company can into LLP by complying with the Provisions of clause 58 and Schedule III and IV of the LLP Act.
No, only private / unlisted public company can be converted into LLP.
Every LLP has to maintain uniform financial year (April to March) ending on 31st March of a year.
It is not mandatory to file the charge details with the office of Registrar but the stakeholders can voluntarily file the same on the request of loan provider.
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