A Limited Liability Partnership or LLP is known as a legal body that includes a corporation and a partnership firm. In this kind of partnership, the partners have limited liabilities. It denotes that partners not have to pay off the debts of the company by using their personal assets. Simultaneously the individual partners are not required to be responsible for the negligence or misconduct of another partner. An LLP must be registered under the Limited Liability Partnership Act, 2008.
This is important for LLP to follow financial year starting from 1st April to 31st March. Every registered LLP must stick to its annual compliance even there is not any business activity. Even the LLP is closed down and there is not any business bank account, its annual compliance should be met. Irrespective of these conditions, this is essential to meet annual compliance of LLP.
How to file Statement of Account and solvency?
Filling is to be done in the prescribed format according to LLP Form 8
All LLPs have to maintain the Book of Accounts according to the Double Entry method. Form 8 includes a declaration mentioning solvency of the LLP from its designated partners. It contains details of the statement of liabilities and assets as well as LLP's statement of income and expenditure.
Partners should sign on Form 8. A practicing charted account, cost account or company secretary should certify this.
This must be filed within 30 days within 6 months since when financial year is closed. This is by 30th October in every financial year.
LLPs that are having a turnover which exceeds Rs 40 lakh or ones with the contribution that exceeds Rs 25 lakh requires their books of accounts audited by an experienced charted accountant.
Filling must be done by using LLP Form 11
The return is to be filed with the Registrar of Companies
Filling annual return should be completed within 60 days since the end of the financial year. This should be done by 30th May each year
Form ITR 5 should be used to file income tax return of the LLP. By using digital signature of the designated partners, you may download or file income tax return online.
According to the Income Tax Act, all LLPs must complete their financial year by 31st March and file the returns accordingly with the IT Department.
LLPs with annual turnover exceeding Rs 60 lakh requires to audit their books and complete filling of income tax return by 30th September each year.
LLPs whose accounts are not needed to be audited must file their returns by 31st July every year.
LLPs which are not involved in International transactions or manage particular domestic transactions need to file Form 3CEB. Only a qualified chartered accountant should certify the form which is to be submitted by 30th November every year.
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Separate legal identity
Limited liability of partners
Non applicability of partnership Act
Only profit motive
Partners' identity proof – PAN for Indian nationals
BEvidence of registered office – Rent agreement, receipt of property tax and electricity bill
Address proof of partners – Driving license, passport, Bank statement or Electricity bill
Signed documents regarding incorporation
Fill easy form – Details are to be filled in easy questionnaire and documents are to be submitted.
Documents are to be submitted – Essential information and documents must be submitted.
Verification of Documents – All the necessary returns, documents and forms are to be made and verified.
Filing of the forms – Different form and return needed with Registrar of Companies
Completion of work – Once filing of return is completed, documents will be sent to you and DSCs will also be returned to you.
For Filing with Ministry of Corporate Affairs
Under the Limited Liability Partnership Act, 2008 filing of Form 8 and Form 11 is a compulsory need for each registered LLP. Non-compliance with the LLP annual compliance can lead to a penalty. The penalty amount is Rs 100 per day for each form not filed. No upper limit is mentioned for such penalty amount.
Penalty for failure to file Income Tax returns on time is dual:
Rs. 5000 should be paid by defaulters who miss the filing on due date but do so before 31st December of each year
Rs. 10000 is to be paid by LLPs that cannot stick to the extended deadline
Besides LLP annual compliance, there are one-time compliances. Once an LLP has been registered, it is necessary to follow certain needs as follows:
It is mandatory for the LLP to implement and file the LLP agreement under Section 2(O) & (q), 22 and 23 of the LLP Act, 2008 within 30 days of the development with the Ministry of Corporate Affairs. The agreement reveals the rights and duties of the partners and the LLP.
According to the LLP Act, if an agreement is not filed, mutual rights and liabilities must be according to the Schedule I of the Act. Therefore if an LLP desires to stop provisions or needs of Schedule I of the Act, it requires having an LLP Agreement and filed specially excluding the applicability of any or all provisions of Schedule I.
In case filing the Agreement cannot be done within the specific period then it is responsible to be fined at the rate of Rs 100 per day for default with no maximum limit.
Except above, the LLP is needs to apply for the LLP PAN and TAN
Make LLP Bank Account
LLP seal is to be purchased and have LLP stationery made after its incorporation.
Annual return is a compulsory filing that has to be made by all LLPs in India. Annual return with the necessary documents is needed to be filed with the Ministry of Corporate Affairs.
The Statement of Accounts and Solvency is a compulsory filing which is needed for all LLPs in India. The Statement of Accounts and Solvency includes a declaration on the status of solvency of the LLP by the designated partners and also information associated to the statement of income and expenditure and statement of assets and liabilities of the LLP.
The Annual return of LLP is due within 60 days since the end of financial year. Annual return of an LLP is outstanding on or before 30th May in each financial year.
Late filing or non-filing of LLP Annual Return or Statement of Accounts and Solvency before the due date will cause a penalty of Rs 100 for each day of default.
LLP whose turnover is more than Rs. 40 Lakh or whose contribution crosses Rs. 25 Lakh are needed to get their accounts audited by a practising Chartered Accountant.
LLPs require filing income tax return in form ITR-5.
Every LLP must appoint an auditor who must audit their accounts if it is more than the limit of turnover or contribution. Every Auditor requires to be appointed at the starting of each financial year and must hold the office until new auditors are appointed or they are re-appointed.