the partners are not required to pay off the debts of the company using their personal assets and at the same time, the individual partners are not responsible for another partner’s misconduct or negligence.
LLP Annual Compliance
For a Limited Liability Partnership (LLP), the returns should be filed periodically for maintaining compliance and escape heavy penalty under the law for non-compliance. A Limited Liability Partnership has only little compliance to be followed every year which is amazingly low as compared to the compliance requirements placed on the private limited companies. However, the fines seem to be quite large. Whilst non-compliance might only charge a Private Limited company INR 1 lakh in terms of penalties, it might charge an LLP up to INR 5 lakh.
- Filing of the Statement of Account & Solvency:
- Fill up in the prescribed format as per LLP Form 8
- It is compulsory for all LLPs to maintain the Book of Accounts as per Double Entry method. Form 8 contains a declaration on the solvency state of the LLP by its designated partners as well as gives details of the statement of assets and liabilities and statement of income and expenditure of the LLP.
- The form 8 needs to be signed by the partners and requires to be certified by a practicing chartered accountant, company secretary or cost accountant.
- This is required to be filed within 30 days from the end of six months of the close of the financial year that is by 30th October of each financial year.
- LLPs with a turnover of more than Rs. 40 lakh or the ones with the contribution of more than Rs. 25 lakh need to get their books of accounts audited by an active chartered accountant.
B. Annual Return Filing
- The return needs to be filed with the Registrar of Companies.
- Fill up using the prescribed format – LLP Form 11
- This is required to be filed within 60 days from the close of the financial year, in other words by 30th May of each year.
C. Filing of Income Tax Return
- LLPs are required to file their income tax return using Form ITR 5 – it can be downloaded or filed online using the digital signature of the designated partners.
- As per the Income Tax Act, all LLPs are required to close their financial year by the 31st of March and accordingly file the returns with the IT Department.
- LLPs with an annual turnover of more than Rs. 60 lakh need to get their books audited and file their return latest by 30th September every year.
- LLPs whose accounts are not required to be audited need to file their returns latest by 31st July each year.
- LLPs that have got engaged in international transactions or have undertaken specific domestic transactions have to file Form 3CEB. The form needs to be certified by a qualified chartered accountant and is to be submitted by 30th November of each year.
D. MCA and ROC Compliance
- Partners have to contribute equally as per the requirements of the LLP agreement. Such provisions are present under the Limited Liability Partnership Act, 2008. Every Partner is required to equally contribute.
- LLPs are also required to maintain their books of accounts as per the requirements of the MCA and ROC.
- Compliance with the requirements of the Limited Liability Partnership Act, 2008
- Penalty Provisions
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.
Qus:- Financial Year of LLP
Every LLP has to maintain uniform financial year (April to March) ending on 31st March of a year.
Qus:- Is it mandatory to file the charge details to the registrar office?
it is not mandatory to file the charge details with the office of Registrar but the stakeholders can voluntarily file the same.
ROC – Filing: The charge details i.e. creation, modification or satisfaction of charge, can be filed through Appendix to e-Form 8 (Interim).
Qus:- Is annual compliance mandatory for all LLPs in India?
Yes annual compliance is mandatory require for all LLPs in India. If a LLP does not comply with the above requirements, then they are liable to pay penalties imposed by the government. Hence annual compliance is a requirement for all Limited liability partnerships in India.
Qus:- What is the meaning of MCA and ROC compliance for an LLP?
MCA and ROC are specific compliance requirements which have to be carried out by LLPs.
MCA is an abbreviation for the Ministry of Corporate Affairs. This registry looks into the compliance requirements for LLPs in India.
ROC is an abbreviation for Registrar of Companies. This form of compliance has to be carried out either quarterly , half yearly or annually.
Qus:- Apart from the annual compliance requirements of an LLP what are the other requirements which have to be followed?
The LLP has to comply with the rules and provisions of the limited liability partnerships act, 2008. All compliance requirements have to be followed by an LLP.
Qus:- Are there any form of compliances related to the change in partners of an LLP?
Yes there are compliance requirements related to the change in partners of an LLP.
E-Form 4 is required to be submitted to the ROC within 30 days if there is any form of change in the partnership requirements of the LLP.
E-Form 3 also must be submitted to the ROC. This form relates to any rights and duties related to the partnership concern.