Statutory Compliance Checklist for LLP Companies


     Starting a business and running it is never an easy task. You need a lot of patience, skills, time, determination and very importantly a good amount of money to make it move ahead. There are a lot of formalities, law adherence, GST filings, return filings, registration in various departments and so on. To make your business run smoothly, it becomes mandatory that you follow all these rules and regulations and that you are saved from heavy penalties.


Today, we are going to discuss one such entity i.e. LLP and all the mandatory Annual Compliance for LLP Company.


What is an LLP?


LLP refers to a limited liability partnership. It is one of the business entities which are registered under the MCAs (Ministry of corporate affairs). In order to get registered under LLP, a minimum of two people are required as partners and one out of them should mandatorily be an Indian native and resident. It is the responsibility of both the partners to file the income tax returns, maintain accounts book and file the annual returns every financial year.


Benefits of Limited Liability Partnership

     Some of the major benefits that are associated with LLP are as follows:


·        Within two partners, no one is liable to answer for the negligence or misconduct of each other.
·        The business can be directly managed by the partners in an LLP.
·        The limited liability protection is provided by the LLP for all owners.
·        If in case one partner leaves the company, the remaining person can search for a new partner to fill the vacant position.
·        After incorporation of the company, LLP can have as many partners as required.
·        The LLPs have the right to raise the funds from the banks, partners and NBFCs.


Mandatory Annual Compliance for Limited Liability Partnership


All the LLPs that are registered in India need to have the statements of the annual returns and accounts every year. There are three major compliances that are compulsory to be followed:


1.     Filing of the annual return
2.     Filing of ITR
3.     Books of the accounts of the company

 

Filing annual return


There are two types of annual returns that need to be filed by LLP every financial year. These are as follows:


·        FORM 8


The form-8 consists of a complete statement of solvency and account of the LLP. The form 8 needs to be filed within the first 30 days of the ending of six complete months of the financial year. The financial year ending for the LLPs is set as 31st March.


The form needs to be signed by the partners digitally and must be certified by the auditor or CA or the company’s accountant. The form has information about the LLP assets statement along with the total income and expenditure in the entire year. Form 8 has two types: Part A that consists of solvency statements and Part Bb that has account, income and expenditure statements. If the form is not filed in times, a penalty of 100 RS is charged per day.


·        FORM 11


Form 11 consists of the annual returns. It has details of every partner along with each one’s contribution to the organization. The form 11 needs to be filed within the first 60 days of the ending financial year i.e. on or before May 30 every year.


Filing Income tax


Another important Annual Compliance for LLP Company is filing of the income tax returns if the annual turnover crosses Rs 40 Lakhs. The account books need to get audited by the company CA if in case the capital crosses Rs 25 Lakhs. The last date to file ITR is September 30th every year. If in case the tax audit is not required, the last date is July 31st.


The income tax return has to be filed via FORM-5. This form can be submitted online through the income tax official site or through offline submission. The payments can be made online or through the banks.


Account Books


Proper account books have to be maintained by all the LLPs on accrual or cash basis. Every year, the report needs to be submitted on or before 31st March. The books need to be presented in the office as and when needed. The accounts have to be audited by the company chartered accountant.


These are some of the major Compliance for LLP Company that needs to be adhered to strictly in order to run the business smoothly.


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Comments

  1. Anonymous7 July 2022 at 22:14

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