LLP Annual Compliance: Comprehensive Overview

In India, a Limited Liability Partnership (LLP) is a widely adopted business structure that combines the benefits of a partnership by providing flexibility and a company by limiting the liability of the partners. Governed by the Limited Liability Partnership Act, 2008, LLPs are designed to offer an efficient and cost-effective way to manage and grow a business.

Timely annual filings are essential for any form of business structure, be it a company or an LLP, because annual filings are considered as a crucial aspect of maintaining a business structure’s legal status and operations in check. Regular annual filings help in avoiding penalties, legal complications, and potential disputes with authorities.

Here’s an overview of the essential annual compliance requirements for LLPs:

1. Annual Return (Form 11)

• Purpose: Form 11 is an annual return that details the summary of the LLP’s partners and their contributions.

• Deadline: Must be filed within 60 days from the end of the financial year, i.e., by May 30th each year.

• Key Information:

• Total number of partners

• Contributions received from partners

• Details of penalties imposed on the LLP or its partners (if any)

• Penalties for Late Filing: 100₹ per day until the form is filed.

2. Statement of Accounts & Solvency (Form 8)

• Purpose: Form 8 is used to declare the financial health of the LLP. It contains the balance sheet. it also contains the declaration of solvency. 

• Deadline: Could be lodged within 30 days from the end of six months of the financial year, that is, by 30th October each year.

• Key Information:

• Statement of assets and liabilities

• Statement of income and expenditure

• Declaration of solvency by the partners

• Penalties for Late Filing: 100₹ per day until the form is filed.

3. Income Tax Return Filing

• Form: ITR-5 for LLPs.

• Deadline: July 31st for LLPs not requiring audit, September 30th for those requiring audit (unless extended).

• Key Information:

• Computation of total income

• Tax payable or refundable

• Attachments:

• Audited financial statements (if applicable)

• Tax audit report (if applicable)

4. Tax Audit (if applicable)

• Applicability: Required if the turnover exceeds 1 crore ₹ (₹ 50 lakhs for professional LLPs).

• Purpose: A tax audit is conducted to ensure that the financial records are accurate and in compliance with the Income Tax Act.

5. Maintenance of Books of Accounts

• Requirement: LLPs must maintain proper books of accounts on a cash or accrual basis at their registered office.

• Inspection: The books must be kept for at least 8 years and be open for inspection by partners.

6. Designated Partner KYC

• Form: DIR-3 KYC

• Deadline: April 30th every year for designated partners with a DIN allotted on or before March 31st of the financial year.

• Purpose: To update the KYC details of designated partners.

• Required Documents: PAN Card, Aadhaar Card, Address Proof, DSC.

7. GST Compliance (if applicable)

• Monthly/Quarterly Returns: Depending on the turnover, LLPs may need to file GSTR-1, GSTR-3B, and GSTR-9 annually.

• Reconciliation Statement (GSTR-9C): Required for LLPs with turnover exceeding 2 crores ₹.

8. Estimated Costs for Annual Compliance

• Basic Compliance Package: 10,000₹ - 15,000₹ per annum (includes Form 11, Form 8, and ITR filing).

• Advanced Compliance Package: 20,000₹ - 50,000₹ per annum (includes tax audit, GST compliance, and additional advisory services).

• Penalties for Late Compliance: 100₹ per day for ROC forms, potential penalties for late tax filing.

9. Package Offers

• We at InstaBiz filings, provide annual compliance for LLPs covering the scope of mandatory annual filings in Form 8, Form 11 and DIR-3KYC of partners starting at just 4,000/-₹ + GST. 

• Many service providers offer comprehensive annual compliance packages for LLPs, typically ranging from 10,000₹ - 50,000₹ or more, depending on the scope and complexity of services.

10. Key Points to Consider

• Filing Deadlines: Mark important deadlines (April 30th for DIR-3 KYC, May 30th for Form 11, October 30th for Form 8) to avoid late fees.

• Professional Help: Engaging a professional ensures timely and accurate compliance, reducing the risk of penalties.

Disclaimer

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Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.