A Limited Liability Partnership must submit returns on a regular basis to maintain compliance and avoid facing harsh legal penalties for non-compliance. In comparison to the compliance criteria imposed on private limited corporations, the number of compliances that must be adhered to by a limited liability partnership each year is very minimal. The fines, nevertheless, appear to be rather high. While non-compliance may only result in fines of up to ₹1 lakh for a Private Limited firm, it may result in fines of up to ₹5 lakh for an LLP.
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A fine of ₹100 per day of delay may be imposed in case of failure to file form 8 of LLP or form 11.
Compliances that LLP Need to Follow
Due to the fact that limited liability partnerships are independent legal entities, the partners have certain legal responsibilities. This includes keeping a complete book of accounts and submitting a yearly return to the Ministry of Corporate Affairs.
Except in cases wherein their annual revenue exceeds ₹40 lakhs or if the contribution exceeds ₹25 lakh, Limited Liability Partnerships are not obliged to evaluate their books of account. As a result, if an LLP meets the aforementioned requirement, there is no need for them to have their books of accounts audited, simplifying the yearly filing procedure.
Limited Liability Partnerships must complete their Annual Return and Statements of Account & Solvency within 60 days of the completion of the fiscal year and within 30 days of the conclusion of the first six months of the fiscal year, respectively.
Unlike corporations, limited liability partnerships are obligated to follow the fiscal year, which runs from April 1 till March 31. Thus, even if an LLP hasn't conducted any business during a given fiscal year, it must nevertheless compile the Statement of Accounts & Solvency by the deadline of October 30 and submit its annual return by May 30th. Regardless of whether the LLP has started any commercial operations or not, several yearly reports are required.
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Statements of Accounts and Solvency
Each year, Form 8 must be filled out and submitted by all registered LLPs. Form 8 of LLP requests information on the revenue generated and additional financial information related to the firm. Form 8 of LLP needs to be validated by a professional chartered accountant, licensed company secretary, or licensed cost accountant in addition to being witnessed by the respective signatures of the authorised partners. A charge of ₹100 per day will be levied if the statements of accounts and solvency report are not submitted by the deadline. Form 8 of LLP must be submitted no later than October 30th of every fiscal year.
Sample of LLP Form No.8
Filing Annual Return
Annual Returns must be submitted on the required Form 11. This document is regarded as an overview of the LLP's management activities, including the number of partners and their names. Additionally, form 11 must be submitted annually by May 30th.
What Exactly is Form 11?
All LLPs are required to submit Form 11, an annual return, irrespective of the total profit earned during the year. Even when an LLP doesn't engage in any operations or transactions during the fiscal year, Form 11 must still be submitted. In addition to the fundamental information about the Name, Address of LLP, and Partners/Designated Partnership data, the following extra details must be stated:
- The entire amount is invested by or by every LLviolations that were committed during the course of the financial year.
- It has to be submitted electronically using the
- P partner.
- Details on notices of penalties and compounded
MCA site. There is a pre-fill alternative available to minimise your labour, and a pre-check button is offered to ensure the data input is correct.
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Sample of LLP Form No. 11
Steps to File LLP Form No. 8
You can follow the instructions below to file your LLP Form No. 8 within the due date.
- First, download the LLP Form No. 8 and the instruction kit from the MCA website.
- Next, find out your LLPIN, which the LLP Identification Number. If you’re unsure about your LLPIN, you use the Find LLPIN feature on the MCA site. You’ll need to enter your LLP name and all results related to the name will be shown. Check out your LLP and note the LLPIN.
- Automatically, fill in basic details for LLP Form No.8 using the pre-fill option.
- Fill in other information, and attach mandatory documents such as Disclosures under Micro, Small and Medium Enterprises Development Act, 2006.
- Next, fill in the details of the person signing the form. Also, use the tool ‘Check Form’ to confirm if all details have been filled in. If there are no errors use the digital signature and click on pre-scruntiny. If everything is corrected, you’ll get pop-up - “No Pre-scruntinty errors found”
- Now, login to the MCA site using your credentials.
- Next, click on the button to upload the e-form. In the next page, select your form and upload it.
- A new window will pop-up asking for payment on successfully uploading the form. Select your mode of payment and complete the payment. Once paid successfully, the page will generate the challan. Save for future reference.
Steps to File LLP Form No. 11
- First, go to the MCA website and login with your credentials.
- Next, go to e-filing under the MCA services option.
- Now, download the form by clicking on LLP Forms Download
- Next, open the form and start filling out the details.
- After completing the details, use the DSC to sign the form.
- Now, upload the signed from on the MCA portal and make the payment when prompted. Download the acknowledgement on submission.
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Filing and Audit Requirements Under Income Tax Act
According to the Limited Liability Partnership Regulation of 2008, Limited Liability Partnerships must have their books of accounts reviewed by licensed Chartered Accountants if their revenue exceeds ₹40 lakh or their investment exceeds ₹25 lakhs. An LLP must submit its tax return by September 30th in order to have its accounts audited.
NOTE: Under operation from FY 2020-21, the baseline level for a taxation audit is raised from ₹1 crore to ₹5 crores if the taxpayer's financial receipts are restricted to 5% of gross revenues or turnover and if the taxpayer's monetary payments are restricted to 5% of the total expenditures according to the Income Tax Act of 1961.
The deadline for tax filings for LLPs for whom a revenue audit is not necessary is July 31. LLPs that have engaged in certain domestic operations or overseas transactions with linked businesses must submit Form 3CEB. A chartered accountant who is currently in practice must certify this form. Limited Liability Partnerships that must submit this Form may file their taxes by November 30th.
LLPs must submit Form ITR 5 for their income tax return. With the aid of the chosen partner's digital signature, this form may be submitted electronically through the income tax website.
Conclusion:
A Limited Liability Partnership (LLP) must submit returns on a regular basis to maintain compliance and avoid facing harsh legal penalties for non-compliance. Unless an LLPs annual revenue exceeds ₹40 lakhs or if the contribution from each partner exceeds ₹25 lakh, Limited Liability Partnerships are required to audit their books of account. According to the Limited Liability Partnership Regulation of 2008, Limited Liability Partnerships must have their books of accounts reviewed by licensed Chartered Accountants if their revenue exceeds ₹40 lakh or their investment exceeds ₹25 lakhs.
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