As per the sec 2 (N) of LLP act, 2008, Limited Liability Partnership can be defined as the partnership established under the Limited Liability Partnership Act 2008.
Defining Foreign Limited Liability Partnership
Any business that is formed, or registered outside India and establishes within the place of India can be defined as Foreign Limited Liability Partnership.
Basically Limited Liability Partnership is governed by rules and regulations given under the Limited Liability Partnership Act, 2008.
Before jumping onto knowing about Annual Compliances LLP, lets know the basic terms or regulations below.
An LLP can be easily formed when two or more persons get associated with each other and are willing to start a lawful business for earning profits.
Who is the Regulatory Authority?
MCA i.e. The Ministry of Corporate Affairs is the Regulatory Authority in this case.
Necessary Compliances for an LLP
The below mentioned compliance requirements must be filed with the Ministry of Corporate Affairs (MCA):-
- Annual Return Filing– LLP Form-11
- Statement of Account & Solvency Filing – LLP Form-8 (Statement of Statement of the Accounts/Financial Statements)
- Income Tax Returns Filing
- Brief Overview of the Mandatory Compliances
The Annual Return, also known as Form 11, is a summary of an LLP’s Partners and a hint of management change.
It is mandatory for every LLP to submit Annual Return on Form 11 to the Registrar post 60 days of the end of fiscal year.
Filing of Statement of Account & Solvency
(Filing of Annual Accounts/ Statement of Accounts/ Financial Statements/ P&L & Balance Sheet)
- LLP must keep accurate books of accounts. The records might be on cash premise or gathering premise.
- Every year that ends on March 31st, a Statement of Solvency (Accounts) must be prepared.
- Each year, the LLP Form – 8 must be submitted to the Registrar of Companies by October 30.
- It must be noticed that LLPs/FLLPs whose yearly turnover surpasses Rs. 40 lakh, or the partner owes more in contributions than Rs. 25 lakh must have their accounts audited by an LLP or FLLP auditor on a mandatory basis.
| Form | Due Date | Authority |
| Form – 11 (Annual Return) | 30th May | Ministry of Corporate Affairs |
| Form – 8 (Statement of Accounts) | 30th October | Ministry of Corporate Affairs |
| Income Tax Return (ITR-5 Form) | 31st July – If tax audit is not required.30th September – If tax audit required. | Income Tax Department |
The LLP Form 11
Annual Return is a summary of all designated partners, including whether or not the management of the LLP has changed. Every LL P is required to submit a Form 11 annual return to the Registrar of Companies within 60 days of the end of the financial year—that is, the annual return must be submitted by May 30 each year. For the financial year 2017-2018, the last day to submit an annual return using form 11 is May 30, 2018.
LLP Form 8
Every LLP must be done preparing and closing its accounts by March 31st of each year. It must prepare a Statement of Accounts each year that ends on March 31 and keep their books of accounts in the Double Entry System. Each year, on or before October 30th, From 8 must be filed with the Registrar by at least two Designated Partners.
Accordingly, the statement of accounts for the 2017-2018 financial year must be filed by October 30, 2018, for the current fiscal year.
Every LLP is required to submit an income tax return each year. Because an LLP is a separate legal entity, you must always file the LLP Income tax return in addition to the partner’s return. The last date of filing of income tax return for LLP is 31st July or 30th September, by and large.
On the off chance that LLP’s books of records are not expected to be reviewed, then in such a case, due date filing income tax return form would be 31st July and assuming LLP is covered under charge review for example books of records are to be inspected, due date filing Income tax return would be 30th September would be 30th September.
Audit LLP
A Practicing Chartered Accountant is required to do the following audit.
Tax audit
Each LLP with a turnover of more than INR 1 crore. under section 44AB of the Income Tax Act, a business or a profession must have its books of accounts audited for tax purposes. This audit must be finished and submitted by September 30.
LLP Act
It should be noted that only LLPs with an annual turnover of more than Rs. 40 lakhs or whose commitment surpasses Rs. 25 lakhs are expected to get their records examined.
Certificate from the Company Secretary
An annual return filed on Form 11 must be certified by a Company Secretary in Practice for LLPs with a turnover of more than five crore rupees or contributions of more than fifty lakh rupees.
Penalty for Late Filing
In the event that Forms 8 and 11 of the LLP are not filed on time, a penalty of Rs. From the time the return is due to be filed until the actual return is filed, a daily fee of $100 per form is due.
If an income tax return is not submitted on time, a penalty of Rs. 5000 will be assessed for late returns submitted between August 1 and December 31 of the assessment year. If the return is submitted after December 31 of the same assessment year, a penalty of Rs. 10,000 will be assessed.
Now let’s read what happens if you fail to do the Annual Compliance LLP
Benefits for LLP in contrast with a Private Limited Company
Exemptions from the need to keep a Minutes Book, Statutory Registers, and other records, such as flexible tax rates.
No, AGM isn’t needed for a LLP. AGM is a once in a year meeting for Investors of the Organization. An LLP does not have a shareholding structure, so no AGM will be held.
Board Meeting is basically connected with a Board of Directors Meeting. An LLP does not have directors; instead, designated Partners run the company and are held accountable for compliance. Subsequently, the Board of Partners meeting is proposed in the event of a LLP firm.
The maximum number of partners is unlimited.
Bottom Line
To conclude, this article made a detailed analysis on different aspects of LLP compliances such as necessary compliance checks, defining of regulatory authority, benefits of LLP as compared to other businesses etc. 2
