Annual Compliance of LLP: Form 11, Form 8, Audit Applicability, Penalties

ANNUAL COMPLIANCE OF LLP

Introduction: A Limited Liability Partnership has only few compliances which is low as compared to the compliance requirements by the private limited companies but bear in mind that the fines can be quite heavy if not complied with. LLPs are obligated to maintain accounts and submit annual returns to the ROC and ITR to the tax department. It’s crucial to timely file mandatory Form 11 and Form 8 with ROC to avoid stringent penalties.

FORM 11: Annual Return of LLP

Form 11 is to be filled by all LLPs irrespective of turnover or business transaction during the year. The aim to file Form 11 is to report any significant changes in the LLP during the past financial year, such as changes in designated partners or partners.

POINTS TO BE MENTIONED IN THE FORMS

• Details of LLP / company in which partners /DP are director or partner.
• Total Contribution by the partners of LLP
• Penalties imposed /compounding offenses committed during the financial year.

Due Date: 30^th May of every year (i.e, within 60 days from the Closure of financial year)

FORM 8: Statement of Accounts

The aim is to file the Form 8 is to declare the financial position of the LLP to the ROC. As it is important for any business that it should be financially sound and capable to pay its debt or liabilities.

Attachment:

• Disclosure under Micro, Small and Medium Enterprises (MSME) Development Act, 2006 (Mandatory)
• Statement of contingent liabilities not provided for, if any (Optional)

Due Date: 30^th October of every year( i.e, 30 days from the end of six months of the financial year)

AUDIT APPLICABILITY

Audit of books is not mandatory for all the LLPs as compared to company it is mandatory for all the Company. In case of LLP, it is applicable only to those LLP where in any financial year: –

• Turnover exceeds 40 Lakhs

or

• Contribution exceeds 25 lakhs

Penalty for Non -Filling of Form 11 and Form 8

The Penalty for non-filing of Form 8 & Form 11 is Rs 100 per day till 31st Mar 2021. W.e.f 01st April 2022, late fee for LLP Compliance has been amended as follows:

Frequently Asked Questions:

1. If the LLP is incorporated after 30 September of financial year, is it still require to file the annual return?

In case LLP has been incorporated on or after 1st October of financial year, then LLP can close its first financial year for filing of ROC returns (Form-11 & Form-8) either on the coming or next 31st March i.e. LLP can file ROC returns of its first financial year with details for 18 months.

2. Is annual return mandatory for LLP?

Yes, annual return is mandatory for all LLPs registered in India regardless of business activity or turnover.

3. What is the due date for filing Form 11 (Annual Return) by LLPs?

Form 11 should be filed within 60 days after the financial year-end, typically by May 30th each year.

4. Is a tax audit mandatory for all LLPs?

A tax audit is mandatory for LLPs with an annual turnover exceeding Rs. 40 lakhs or contributions exceeding Rs. 25 lakhs.

5. Who can digitally sign Form 8 for LLPs?

Form 8 can be digitally signed by two designated partners of the LLP and must be certified by a company secretary, chartered accountant, or cost accountant. If audit is applicable in addition to the above it must be digitally signed by the auditor.

6. What are the due date for all necessary Compliance by the LLPs ?

Conclusion: Annual compliance plays a vital role in ensuring the legal and financial integrity of LLPs. Form 11 and Form 8 filings, along with audit requirements, are essential aspects of LLP compliance. Timely adherence to these obligations helps maintain transparency and avoid penalties. Understanding the regulatory framework and meeting the stipulated deadlines is crucial for LLPs to operate smoothly and remain compliant with statutory requirements.