For a Limited Liability Partnership (LLP), the returns shall be filed regularly for securing compliance and avoid the hefty penalties provided under the law for its non-compliances. An LLP has limited compliances to be ensured every year, which are immensely less as compared to the compliance obligations placed on the private limited companies. However, the fines and penalties are quite high. While non-compliance might only cost a private company rupees 1 lakh in terms of penalties and fines, it might cost an LLP up to 5 lakh
An LLP is a separate legal entity; so, it is the responsibility of the designated partners to keep and maintain proper books of accounts and file an annual return with the Ministry of Corporate Affairs (MCA) annually. LLPs are not obliged to audit their accounts except where their annual turnover is more than forty lakh or if the contribution is more than twenty-five lakh. Therefore, an LLP is exempted from getting the books of accounts audited if the said conditions are fulfilled, making the process of the annual filings simpler.
LLPs in India are required to file an annual return within 60 days from the end of the financial year and statement of account & solvency within thirty days from the end of six months of the closure of the financial year. In addition to the annual return, LLPs are also required to file an income tax return every year mandatorily. MAG provides complete LLP compliance services which include annual filing of LLPand complying with the filing of the income tax return.
Statements of Accounts and Solvency
All registered LLPs are obligated to have their books of accounts in place and fill in data for the profit made, and other financial data in regards to business, and submit it in Form 8 annually. Form 8 needs to be attested by the designated partners and should also be certified by a practising chartered accountant or a practising company secretary or a practising cost accountant. Failure to file the statement of accounts & solvency report within the time limits prescribed tends to impose a fine of INR 100 per day.
Filing Annual Return
Annual Returns are required to be filed in the prescribed Form-11. This form aims to provide a summary of management affairs of an LLP, like numbers of partners along with their names. Form 11 is required to be filed by 30th of May every year. We can provide you expertised assistance in LLP annual return online filing in Delhi, India.Form 11 needs to be certified by a Company Secretary in whole-time practice if the total contribution of partners exceeds Rs. Fifty lakhs or turnover exceeds Rs. 5 crores,
Filing and Audit requirement under the Income Tax Act
As discussed earlier, LLPs whose turnover is more than forty lakh or whose contribution margin has exceeded twenty-five lakh have to get the books of account audited by a practising CA. The deadline to file the income tax return for an LLP which are liable to get his accounts audited is 30th of September of the relevant assessment year.
Significant benefits enjoyed by Limited Liability Partnership are:
1. LLP is a separate legal entity from its partners.
2. LLP can quickly Transfer its ownership
3. It has assets and liabilities that are distinctive from that of its promoters.
4. It can raise funds from Banks, Partners and NBFCs.
LLP Annual Filings at MAG
The compliances as mentioned are mandatory to be followed irrespective of turnover or number of transactions. Limited Liability Partnership, which is growing in the business world, has to bear the burden of numerous compliances to avoid the liability resulting from fines and penalties. Since LLP has to comply with way fewer compliances than the company, it is always good to file all the returns and forms before the due date to avoid hefty penalties with timely annual LLP compliance filing
We at MAG help our clients to stay fully compliant with the LLP annual return Online, mandatory filings and compliances with the help of our professionally managed and high-quality team of experts.
Frequently Asked Questions
- What are the mandatory annual filing compliances for an LLP?
An LLP is mandatorily required to file Form 8 and Form 11 annually.
Through Form 8, an LLP submits its Statement of Accounts and Solvency to the registrar, and it needs to be filed within 30 days from the end of 6 months of the financial year ending (30th October).
The annual return of an LLP is filed in LLP Form 11, and its due date is 60 days from the end of each financial year (30th May).
- Do LLPs have to file their income tax return separately from their partners?
Yes, an LLP needs to file its income tax return separate from its partners as it is a separate legal entity.
- When does an LLP need to be audited?
An LLP needs to get its accounts audited for the financial year in which its turnover exceeds Rs 40 lakhs, or its contribution exceeds Rs 25 lakhs.
- What are the additional fees provisions for late filing of LLP Form 8 and LLP Form 11?
If an LLP fails to file Form 8 or 11 within its due date, Rs 100 will be charged additionally for each day of delay.
- When do I need to file the statement of accounts and annual return of the LLP if it is incorporated at the end of the financial year?
An LLP can file its statement of accounts and annual return of 18 months period for its first financial year filing. It means if an LLP is incorporated on or after the 1st day of October, it can close its financial year in the next year and consequently file its forms in the next year.
- Do I need to file the LLP annual forms even if the LLP has not conducted any business in a financial year?
Yes, the requirement of filing LLP Form 8 and 11 is a mandatory requirement, irrespective of whether the LLP has conducted any business or not.