Annual Compliance of Limited Liability Partnership

April 7, 2021

LLP (LIMITED LIABILITY PARTNERSHIP) is also registered with MCA and likewise Company LLP also needs to comply with the Annual Compliances every year.

LLP Annual Compliance mainly includes:

-Filing of Form 8

-Filing of Form 11

Annual Compliance is mandatory to be done every year even if the business is not started or in any year the business is running on loss or having NIL transactions.

Let us understand the Forms required to be filed:

Form 8 is for Statement of Account & Solvency and Form 11 is Annual Return of Limited Liability Partnership (LLP).

The designated partners have to file a declaration of the solvency of the LLP and also information related to the statement of assets and liabilities and statement of income and expenditure of the LLP in Form 8. This form has to be filed by the LLP on an annual basis.

Form 11 is an Annual return that is required to be filled by all LLPs.

The Due Dates:

Form 8: Within 30 days from the end of 6 months from the closure of every Financial Year.i.e.30th October of every year.

Form 11: Within 60 days from the end of every Financial Year i.e. 30th May of every year.

Penalty or Consequences for not filing Form 11 and Form 8 is Rs.100/- per day for each form up to the date of filing of forms.

Signing:

Form 8 needs to be signed by the partners and requires to be certified by a practicing Chartered Accountant, Company Secretary, or Cost Accountant.

In the case of Form 11, the Form needs to be signed by Designated Partners and if ,

The turnover of the LLP exceeds Rs.5 crores or Partner’s Total Contribution exceeds Rs. 50 lacs then it needs to be certified by a Company Secretary in whole- time practice.

Audit Requirement of LLP:

LLPs with a turnover of more than Rs. 40 lakh or the ones with the contribution of more than Rs. 25 lakh are required to get their books of accounts audited by a practicing Chartered Accountant.

The Financial year in case of LLP:

The Financial Year should be from 1st April to 31st March.

If LLP is incorporated on or after 1st October of the financial year, then LLP can close its first financial year either on the following or next 31st March i.e. LLP files its first financial year details for 18 months.

Let us understand with the help of Example:

If the LLP is incorporated on 5th April 2018 then its financial year will close on 31st March 2019, here the due date of Form 11 will be 30th May 2019 and for Form 8 it will be 30th October 2019.
If the LLP is incorporated on 15th October 2018 then it has the option to close the Financial Year on 31st March 2019 or 31st March 2020.

Here the Due Date of Form 11 will be 30th May 2020 and for Form 8 it will be 30th October 2020.

Income Tax Return:

As an LLP is a separate legal entity, a separate income tax return is to be filed for an LLP every year. The due date for filing ITR is 31st July of each year. If an LLP is liable for an audit then the due date for filing ITR will be 30th September.

Wise Conclusion:

Irrespective of any other factor, Annual compliance needs to be done by every LLP on timely basis to avoid the Non Compliance.