An LLP or Limited Liability Partnership is a company formed on partnerships wherein all the partners have limited liabilities. In this agreement, one partner cannot be held responsible for the mistakes of another. In other words, all the partners have a set jurisdiction. There are certain rules laid down by the Ministry of corporate affairs which are to be complied by an LLP.

Here’s a list of compliances an LLP has to follow 

Annual returns

Irrespective of whether the company has done business or not, an LLP has to file returns every year. The returns have to be filed in the form of Form 11 which is to be submitted to the registrar within 60 days after the end of a financial year. 

Financial statements

LLPs with a turnover of Rs 40 lakhs or more, or contribution of Rs 25 lakhs or more are to appoint a Chartered Accountant to do their audits every year. LLPs are required to maintain their book of accounts in a double entry system. They ought to prepare the Statement of Solvency every year by 31st March. Every year, the same should be filed in the form 8 with the registrar of companies by 30th October.

Income tax

Tax Audit of the accounts is mandatory for an LLP with annual turnover of Rs 100 lakh or more. (upto FY 2019-20). However, from 2020-21, it would be applicable for turnover above 500 Lakhs.

Income tax returns have to be filed under ITR 5. And the income tax rate for an LLP is 30%. This is to be filed irrespective of the audit applicability

Section 115JC states that the tax payable by an LLP should not be less than 18.5% of the adjusted total income. (AMT).

If an LLP’s turnover doesn’t exceed Rs 40 lakh it doesn’t require LLP Audit and the due date to file the income tax is 31st July.

Those with a turnover of more than Rs 40 lakh will have to file their income tax by 30th September.

The LLPs who have done international business ought to file Form 3CEB which must be approved by a CA. The due date to file income tax in such cases is 30th November of every year.

If an LLP fails to comply by the rules then the registrar of companies can send in legal notice and initiate an action against the company. Failure to comply by the due dates, the company and the partners will have to pay the penalty amount.

Other mandatory forms filing as required from time to time and Government norms like DIR-3 KYC.

Please note that there is difference between tax audit and LLP Audit. Both have their set criteria as mentioned above.

For more information about compliances for LLP do mail your queries to caswetamakwana@gmail.com

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Company: Makwana Sweta & Associates
Location: Mumbai, Maharashtra, IN
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A qualified Chartered Accountant with over 4 years of rich experience in Company Law, Audits, Accounts & taxation. She is a writer at her own blog https://insights.caswetamakwana.com/. She is keen in streamlining business accounts of the Company and provide Startup consultancy. View Full Profile

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One Comment

  1. ANIL KUMAR BANGAD says:

    if LLP has turnover below Rs. 40Lakhs, so there is no need to do tax audit also, only ITR 5 is filed.
    And for LLP, we cannot take 44AD, so what is the minimum profit to be shown in ITR ie. 8% or 6% or any other amount ?

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