Limited Liability Partnership (LLP) ROC Annual Compliance
Complete Solution - Documentation, Filing, Approval
All LLPs registered with the Ministry of Corporate Affairs need to file Annual Returns and Statement of Accounts for every Financial Year. It is mandatory for a LLP to file a return irrespective of whether it has done any business.
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General Overview
Benefits
Legal compliance is a primary requirement for any business. The status of LLP annual filing is displayed at the Master Data of the LLP on MCA portal and the same can be accessed by any person. For loan approvals or any other similar requirements, compliance is a major criterion to measure the credibility of the organization.
Record of Financial Worth
The forms filed by the LLP are accessible by companies. Hence, while entering into contracts or major projects, the concerning party may also inspect the financial worth. LLP annual filing provides the record of its financial worth and capacity to an interested person or party.
Stays Active and No Penalties
In case of consecutive default in annual filing, the LLP can be declared as defunct or receive default status. Also, the partners can be declared as defaulters and may also be disqualified from their further appointment in LLP or company. Hence, LLP needs to file the return to maintain active status. Regular filing also saves the LLP from heavy additional fee and penalties.
Conversion or Closure
Regular annual compliance filings facilitate easier conversion of Limited Liability Partnerships into other types of companies, as well as quicker resolutions in case of dissolution of partnerships.
Mandatory Annual Compliance
Annual return of a LLP is due within 60 days of close of financial year. LLPs must uniformly maintain a financial year that starts on April 1st and ends on March 31st, therefore the Annual return of a LLP is due on or before May 30th of each financial year.
Form 11 contains details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners. All LLPs should file this form within 60 days from the closure of the financial year with the prescribed fee. Hence, the due date for filing LLP Form 11 is 30th of May each year.
Statement of Accounts and Solvency (LLP Form 8)
Statement of Accounts and Solvency of a LLP is due within 30 days from the end of six months of close of financial year. Statement of Accounts and Solvency is a mandatory filing that is required for all LLPs in India. Statement of Accounts and Solvency contains a declaration on the state of solvency of the LLP by the designated partners and also information related to statement of assets and liabilities and statement of income and expenditure of the LLP. This must be digitally signed by 2 designated partners and it must be certified by a chartered accountant/company secretary/cost accountant if the total turnover of the LLP exceeds Rs. 40 lakhs or partner’s obligation of contribution exceeds Rs. 25 lakh. Form 8 has contains Statement of Solvency, Statement of Accounts and Statement of Income & Expenditure.
Income Tax Return Filing
LLPs must file income tax return using Form ITR 5. Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner. The deadline for LLP tax filing in India is 31st July if tax audit is not required. LLP whose turnover exceeded Rs. 40 Lakh or whose contribution exceeded Rs. 25 Lakh are required to get their accounts audited by a practicing Chartered Accountant. The deadline for tax filing for LLP required to obtain audit is 30th September
Documents required for LLP Annual Filing
Following documents are require to do annual filing
- Certificate of Incorporation of LLP
- PAN card of LLP
- LLP Agreement along with supplementary agreement, if any
- Financial Statement of LLP duly signed by the Designated Partners
- DSC of all Designated Partnerner
Penalty Provisions
As per the Limited Liability Partnership Act, 2008 filing of Form 8 and Form 11 is a mandatory requirement for every registered LLP. Non-compliance with the LLP annual compliance leads to a penalty. The penalty amount is. 100 per day for every form not filed. No upper ceiling is specified for such penalty amount.
For Income Tax Filings
The penalty for defaulting on the filing of Income Tax returns on time is two-fold – Rs. 5000 is to be paid by defaulters who miss the filing due date but do so before 31st December of each year. Rs. 10000 is payable by LLPs that fail to stick to the extended deadline.
Frequently Asked Questions
LLP Annual Filing is necessary for every LLP since its incorporation. From the closure of its first financial year, the LLP must file both the forms within the prescribed time limit. The annual compliance is mandatory for every LLP, irrespective of the number of transaction, turnover or commercial activity undertaken.
The audited books of accounts are necessary for the LLP falling under any of the below-mentioned criteria: 1) If turnover of the LLP exceeds ₹ 40 Lakh; or 2) Total contribution of Partners exceeds ₹ 25 Lakh. If LLP does not fall under any of the above criteria, statements with the signature of partners are sufficient.
Due dates of LLP compliance are based on the closure of each financial year. Financial Year of every LLP must be closed on 31st March. However, period of financial year depends on the month of its incorporation: a) LLPs registered between 1st April and 30th September: The LLP must close its financial year on 31st March of next calendar year. Suppose LLP is registered on 1st May, 2018 , the same should close its financial year on 31st March, 2019. b) LLPs registered between 1st October and 31st March: The LLP has an option to choose the end of its financial year. For instance if the LLP is registered on 30th October, 2018 the same can close its financial year either on 31st March, 2019 or 31st March, 2020.
Yes, every LLP has to mandatorily file Annual Returns and financial statements with the Ministry even if they are not doing any business. It is a compulsory requirement of law that even NIL returns should be filed.
Income Tax Return: Every LLP has to file Income Tax Returns every year. The last date of filing of return for LLP is 31st July every year. However, any LLP under tax audit is required to file its Income tax return by 30th September. Audit under Income-tax Act: Every LLP whose turnover exceeds INR 2 Cr. in case of a business or INR 50 Lakh in case of a profession, is required to get its books of accounts tax audited under section 44AB of the Income-tax Act. Such audit will have to be completed and filed by 30th September.
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