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LLP Compliance

Compliance Requirements for Limited Liability Partnerships (LLPs)

Limited Liability Partnerships (LLPs) are recognized as distinct legal entities and thus, must adhere to specific compliance obligations. The responsibility for ensuring compliance falls on the Designated Partners of the LLP. The core compliance requirements for LLPs include:
  • 1. Maintenance of Proper Books of Accounts
  • 2. Filing of Annual Return
  • 3. Filing of Statement of Accounts
  • 4. Filing of Income Tax Return (ITR - 5)
  • 5. Filing of Tax Audit (If Applicable)
Meeting these compliance obligations is crucial for maintaining the LLP’s legal status, as well as for enhancing transparency, credibility, and financial accountability.

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Annual Compliance of Limited Liability Partnership (LLP)

Maintenance of Proper Books of Accounts

An LLP must keep accurate and up-to-date financial records. These records should detail all financial transactions, including profits, expenses, assets, and liabilities. Proper bookkeeping is essential for assessing the financial health and performance of the LLP.

Filing of Annual Return - LLP Form 11

LLPs are required to submit an annual return to the Ministry of Corporate Affairs (MCA) each financial year using Form 11. This form collects important information about the LLP, such as the total number of designated partners, details about each partner, the contributions made by partners, and a summary of the LLP’s partners.

Filing Deadline

The deadline for submitting Form 11 is within 60 days after the end of the financial year, which means it should be filed by May 30th each year.

Importance of Timely Filing

Adhering to this deadline is vital, as failing to file Form 11 on time can prevent the LLP from closing or winding up its operations until all annual returns are filed.

Penalty for Late Filing

If an LLP fails to submit its annual return forms within the due date, it will incur a penalty of Rs. 100 for each day of delay.

Duration of Penalty

The penalty is applicable from the due date of filing until the actual return is filed.

Filing of Statement of Accounts – LLP Form 8

LLPs must also file a Statement of Accounts & Solvency annually using Form 8. This statement details the LLP’s financial position, including its assets and liabilities.

Due Date

Form 8 must be filed within 30 days from the end of the six-month period after the financial year ends.

Signing and Certification

Form 8 must be digitally signed by two designated partners of the LLP and certified by a company secretary, chartered accountant, or cost accountant.

Form Components

Approved financial statements, Directors’ and Auditors’ reports must be sent to all members at least 21 clear days before the AGM.
  • Part A - Solvency Statement: Provides a statement on the LLP’s solvency, indicating its financial health.
  • Part B - Statement of Expenditure & Income, Statement of Accounts: Includes detailed information about the LLP’s income, expenses, and accounts.

Penalty for Late Filing

LLPs must adhere to the filing deadline for Form 8 to avoid penalties. A daily fine of Rs. 100 will be imposed for delays.

Audit and Tax Filing Requirements for LLPs

LLPs must comply with specific audit and tax filing obligations under the Limited Liability Partnership Act, 2008, and the Income Tax Act, 1961:

Tax Audit

Audit Requirement: LLPs with an annual turnover exceeding Rs. 40 lakhs or a contribution above Rs. 25 lakhs must have their accounts audited by a practicing Chartered Accountant. The tax return filing deadline for such LLPs is September 30th.
Note: For Assessment Year 2021-22 (Financial Year 2020-21) and onwards, the audit threshold limit has been raised to Rs. 5 crore, provided cash receipts are less than 5% of gross receipts or turnover, and cash payments are limited to 5% of total payments under the Income Tax Act 1961.

Tax Filing Deadline (Without Tax Audit)

For LLPs not requiring a tax audit, the due date for filing the tax return is July 31st.

International Transactions - Form 3CEB

LLPs involved in international transactions with associated enterprises or Specified Domestic Transactions must file Form 3CEB, certified by a practicing Chartered Accountant. The deadline for filing Form 3CEB is November 30th.

Income Tax Return (ITR - 5)

LLPs must file their income tax return using Form ITR-5. The due date for filing is July 31st unless the LLP requires a tax audit, in which case the deadline is extended to September 30th. Form ITR-5 includes details of the LLP’s income, expenses, and tax liability.

LLP Annual Filing Compliance Calendar

Form Type

  • Form-8
  • Form-11
  • ITR - 5
  • Audit

Description

  • Filing of Statement of Accounts
  • Filing of Annual Returns
  • Income Tax Return
  • Tax Audit (if applicable)

Due Date

  • 30th October
  • 30th May
  • 31st July (or 30th September, if tax audit is mandatory)
  • 30th September

To be Filed With

  • Registrar of Companies
  • Registrar of Companies
  • Income Tax Department
  • Income Tax Department

Benefits of LLP Annual Filing

  • Higher Credibility:
  • Record of Financial Worth:
  • Active and Penalty-Free Status:
  • Simplified Conversion and Closure:
  • Regular compliance enhances the LLP's credibility, aiding in loan approvals and other requirements.
  • Filings create a financial track record, attracting investors and partners.
  • Consistent compliance prevents the LLP from being declared defunct and avoids penalties.
  • Regular filings make it easier to convert LLPs to other business structures and expedite partnership dissolution.

Non-Registrar Compliance

These obligations do not involve the RoC directly but are crucial for lawful business operations:
  • Payment of Periodic Taxes:
  • Periodic Returns:
  • Regulatory Assessments:
  • GST, TDS, TCS, Advance Tax, and Professional Tax (PTax).
  • GST, TDS, Income Tax Returns, Tax Audit Reports, ESIC returns, PF returns, and Professional Tax returns.
  • Compliance with the Environment Protection Act, Competition Act, Factory Act, etc.

Why Munibgiri?

Munibgiri simplifies LLP annual filing by providing expert guidance and handling crucial tasks. We assist in preparing accurate documents, obtaining necessary digital signatures, and ensuring certification by qualified professionals. Our focus on timely filings helps avoid penalties and ensures adherence to compliance requirements. With Munibgiri, managing LLP annual filings becomes straightforward, allowing you to concentrate on your business while we handle the paperwork.
Get started now with Munibgiri to streamline your LLP annual filings and ensure compliance with ease.