What is Limited Liability Partnership(LLP):
Limited Liability Partnership entities, the world wide recognized form of business organization has been introduced in India by way of Limited Liability Partnership Act. A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of organization
Advantages/ Benefits of LLP:
- Low Cost of Formation and is Easy to Form.
- No requirement of minimum contribution.
- No requirement of compulsory Audit.
- LLP requires a minimum 2 partners while there is no limit on the maximum number of partners.
- The liability of the partners is limited to the extent of his/her contribution to the LLP.
- As a Juristic Legal Person, a LLP can sue in its name and be sued by others. The partners are not liable to be sued for dues against the LLP.
- Less Restrictions and Compliance are enforced on a LLP by the Govt. as compared to the restrictions enforced on a Company.
- not only is it easy to start, it’s also easier to winding-up a LLP, as compared to a private limited company.
- Any individual or body corporate can be a partner.
POST INCORPORATION-LLP COMPLIANCES:
PREPARATION AND FILE LLP AGREEMENT WITH MCA:
After incorporation of a LLP, LLP Agreement must be filed with the Ministry of Corporate Affairs within 30 days.
PAN AND TAN APPLICATION:
Online PAN and TAN application of the newly incorporated LLP. The PAN/ TAN Department Send PAN/ TAN of the LLP to the registered office address of the LLP.
BANK ACCOUNT OPENING
Bank account for a LLP can be opened easily, as it is considered to be a corporate entity. The following documents of the LLP must be submitted for opening of LLP bank account:
- Copy of the LLP agreement
- Copy of PAN of the LLP
- Copy of the LLP Registration Certificate issued by the ROC
- Copy of the Resolution to open a bank account
- List of Designated Partners.
- PAN and address Proof of Designated Partners.
APPOINTMENT OF AUDITOR:
No requirement of compulsory Auditor on LLP. Appointment of Auditor is only mandatory if turnover exceeds Rs.40 lakhs or capital contribution exceeds Rs.25 lakhs.
FILING LLP ANNUAL RETURN
File Annual Return within 60 days from the end of close of financial year and Statement of Account & Solvency within 30 days from end of six months of close of financial year. Unlike Companies, LLPs mandatorily have to maintain their financial year, as 1st April to 31st March. Therefore, LLP annual return is due on May 30th and the Statement of Account & Solvency is due on October 30th of each financial year.
Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, are required to file the following Forms with the Registrar every year:
|S. No||Documents||e-Form||Due date|
|1||Annual Return||Form 11||31st May |
Statement of Account & Solvency
|Form 8||30th October |
OTHER EVENT BASE FORM:
Maximum form filing date – within 30 days from the date of event.
NON-COMPLIANCE ATTRACTS A PENALTY:
Care must be taken again to ensure LLP Annual Return is filed on time, as non-compliance attracts a penalty of Rs.100 per day of default.