Annual Compliance for LLP

Annual Compliance for LLP

LLP is that form of business which is a unique combination of company as well as partnership; it is the only medium which gives the benefits of both the entities, as it best suited for those who want less risks and investments with better benefits and returns. It takes the characteristics of corporate entity from company and imposes less compliance being partnership.

Every LLP registered in India bound to file the annual return within 60 days from the closure of the financial year, it should also file the statement of accounts and solvency within 30 days from the end of the 6 months of the closure of the year.

These are the forms that should be filed annually to avoid the legal actions and unwanted penalties:

LLP FORM 11- This from must be filed within 60 days from the closure of the financial year as this form contains all the required details such as number of partners, their contribution details, body corporate details and information about the partners. So the due date of filing this form is 30th May every year.

LLP FORM 8- This form must be filed within 30 days from the closure of the 6 months of the financial year, form should be filed with the required fees,it contains the details of the statement of solvency, statement of Income and expenditure, statement of accounts, must be digitally signed by two authorized partners and also certified by the professionals such as chartered accountant/company secretary/cost accountant.

TAX AUDIT- LLP requires tax audit only if they exceed the limit of annual turnover 40 lakhs and contribution 25 lakhs, therefore it is necessary to maintain the books, records and accounts by the designated partners.

INCOME TAX RETURN FILING– Income tax return must be filed online by filing the ITR 5 form attested with the digital signature of the designated partners online through the Income tax website. Last date of filing the return in India is 31st July, if the limit exceeds then it should be filed after auditing the accounts by a practicing Chartered Accountant till 30th September.

Document Required

Once a LLP is incorporated, certain compliances are mandated by the Ministry that has to be performed. Irrespective of whether the LLP is having any business activity or not and whether the balance sheet of LLP is healthy or not, the compliances have to be duly met. We list down the important compliances that is applicable on all forms of LLP:

1. Filing LLP Annual Return

Every LLP is required to maintain the Books of Accounts as per Double Entry System. It has to prepare a Statement of Solvency (Accounts) every year ending on 31st March. If there are no transactions, then venture formation and allied expenses are to be booked. These expenses can be a part of LLP losses and these can be carried forward and set off in subsequent years.

Every LLP is required to file Annual Return in Form 11 to the Registrar of Companies (ROC). It has to be filed within 60 days from the closure of financial year. An LLP has to close its financial year on 31st March every year. So, the Annual Returns has to be filed on or before 30th May every year.

2. Filing Annual Accounts or Statement of Accounts or P&L and Balance Sheet

All LLPs are required to maintain their Books of Accounts in Double Entry System. They also need to prepare a Statement of Solvency (Accounts) every year ending on 31st March. For this purpose, LLP Form 8 should be filed with the Registrar of Companies on or before 30th October every year.

Form 8 or Annual Statements is applicable to the LLPs registered till 30th September 2017. For LLPs registered after 1st October 2017, the Annual Statements can be filed in 2019.

It should be noted that LLPs whose annual turnover exceeds INR. 40 lakh or whose contribution exceeds INR. 25 lakh are required to get their accounts audited by a qualified Chartered Accountant mandatorily.

3. Filing of Income Tax Return

Every LLP is required to close its financial year on 31st March every year as per the Income Tax Act and is also required to file their returns with the Income Tax Department.

The LLP whose annual turnover exceeds INR. 60lakhs, are required to get their accounts audited under the Income Tax Act provision.

Due dates for an LLP to file their Income Tax Returns are as follows:

1. LLP whose accounts are not required to be audited under any law– 31st July every year.
2. LLP whose accounts are subject to audit under any law– 30th September every year or such other dates as notified by the Income Tax authorities.