LIMITED LIABILITY PARTNERSHIP (LLP)
Limited liability partnership is a registered entity having characteristics of a Company and Partnership firm, which limits the liability of partners to the capital contributed. The LLP is governed by the Limited Liability Partnership Act, 2008.
Thought the compliances applicable on the LLP is less and simple, there are certain mandatory compliances which an LLP is required to fulfill under the Act and in case of non compliance, the LLP may be subject to payment of hefty penalties.
Below is the gist of the compliances to be carried on by an LLP.
MANDATORY COMPLIANCES FOR A LIMITED LIABILITY PARTNERSHIP
1. FILING LLP ANNUAL RETURN (FORM 11)
The LLP is required to file the Annual Return or Form 11. Form 11 is a summary of an LLP’s Partners and about the change in the management. The due date for filing the form 11 is within 60 days from the closure of a financial year. That is, the Annual Return has to be filed on or before 30th May every year.
2. FILING OF STATEMENT OF ACCOUNT & INSOLVENCY (FORM 8)
All LLPs are required to maintain their Books of Accounts in Double Entry System.
Form 8 consists of the statements of account and solvency.
There are two Parts in Form 8. They are:
- Part A – statement of solvency
- Part B – statement of accounts and statement of income & expenditure.
The due date for filing Form 8 is – within 30 days from the end of six months of the financial year, i.e., on or before 30th October.
Audit of the annual account is mandatory in case of-
1. The capital exceeds Rs. 25 lakh; or
2. The turnover exceeds Rs. 40 lakh.
FILING OF INCOME TAX RETURN
LLPs are required to file their income tax return using Form ITR 5 – it can be downloaded or filed online using the digital signature of the designated partners.
|
S. NO |
INCOME TAX RETURN PARTICULARS | DUE DATE |
| 1. | In case Audit is not required
(Those LLPs whose annual turnover does not exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to file their Income Tax. They are not required to get their accounts audited by their Auditor) |
31st July of every year |
| 2. | In Case Audit is required
(Those LLPs whose annual turnover exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to file their Income Tax. They are required to get their books audited under the Income Tax Act.) |
30th September of every year |
| 3. | LLPs Involved in International Transaction
(LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant.) |
30th November of every year |
FEE STRUCTURE OF THE FORMS DISCUSSED ABOVE WHICH ARE TO BE FILED MANDATORILY
|
FORM NO. |
FORM FILING FEES |
| FORM 11 | Varies from INR 50 to INR 200 depending upon contribution in LLP. |
| FORM 8 | Varies from INR 50 to INR 200 depending upon contribution in LLP. |
Event Based Compliances for LLP
Apart from the LLP annual compliance, there are certain one-time/ event based compliances. These are as follows:
Filing of LLP Agreement with MCA
When the LLP is incorporated, It is required to execute and file an LLP Agreement as per Section 2(O) & (q), 22 and 23 of the LLP Act, 2008 within 30 days of the formation with the Ministry of Corporate Affairs. The Agreement mentions the rights and duties of the partners and the LLP.
Table of event based compliances-
|
PARTICULARS |
FORM NO. | TIME LIMIT |
| Appointment/Resignation of Designated Partner/ Partner | Form 3 and Form 4 (As linked Forms) | Within 30 days from the date of such change |
| Name Change of LLP |
Form 5 | Within 30 days from the date of such change |
| Change of Registered Office |
Form 15 | Within 30 days from the date of such change |
| Changes in LLP agreement |
Form 3 | Within 30 days from the date of such change |
| Application of DIN |
DIR-3 | Before 30th September of the immediately next financial year |
| Change in particulars of Directors |
DIR-6 | Within 30 days from the date of such change |
CONCLUSION
In today’s scenario, where the law is getting stricter, there is no options for timely compliances. The cost of non-compliance is always more than cost of compliance. A fully compliance entity always has a better business reputation and attracts funding easily. It’s a great business asset to be compliant.
Disclaimer: This article has been prepared in good faith on the basis of information available on the date of publication without any independent verification. The Author does not guarantee or warrant the accuracy, reliability, completeness or currency of the information in this publication nor its usefulness in achieving any purpose. The Author will not be liable for any loss, damage, cost or expenses incurred or arising by reason of any person using or relying on information in this publication. Readers are requested to consult a professional before taking any action.
(Author – Sonika Bharati, FCS, LL.B. is a Company Secretary in Practice from Delhi and can be contacted at sonika.bharati@gmail.com)
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