LLP Annual Compliance

LLP Annual Compliance: Comprehensive Overview

A​‍​‌‍​‍‌​‍​‌‍​‍‌ Limited Liability Partnership (LLP) in India is essentially a widely known business model that merges the benefits of a partnership where partners enjoy the freedom of a company where the liability of the partners is limited. According to the Limited Liability Partnership Act, 2008, LLPs are designed to be a less expensive and easier way of managing and growing 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:

• Annual Return (Form 11)

1. Purpose: Form 11 is a yearly return which provides the summary of the LLP partners and their contributions.

2. Deadline: The submission is required to be made within 60 days after the last day of the financial year, i.e. by 30 th May of each ​‍​‌‍​‍‌​‍​‌‍​‍‌year.

3. Key Information:

• Total number of partners

• Contributions received from partners

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

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

• Statement of Accounts & Solvency (Form 8)

1. Purpose: The purpose of form 8 is to provide and disclose the financial information of the limited partnership. It shows the balance sheet of the company. It also includes the declaration of solvency.

2. Deadline: It can be submitted anytime within 30 days from the end of the six months of the financial year, that is by 30th October each ​‍​‌‍​‍‌​‍​‌‍​‍‌year.

3. Key Information:

• Statement of assets and liabilities

• Statement of income and expenditure

• Declaration of solvency by the partners

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

• Income Tax Return Filing

1. Form: ITR-5 for LLPs.

2. Deadline: July 31 is the deadline for LLPs that are not required to be audited, and September 30 is the deadline for those that are, however, it can be ​‍​‌‍​‍‌​‍​‌‍​‍‌extended.

3. Key Information:

• Computation of total income

• Tax payable or refundable

4. Attachments:

• Original financial statements, as audited where necessary

• Report from the tax auditor (if any)

• Tax Audit (if applicable)

1. Applicability: The audit is compulsory if the turnover is exceeding Rs 1 crore ₹ (Rs 50 lakhs for professional LLPs)

2. Purpose: A tax audit is performed to check the correctness of the tax returns filed by the assessee as per the provisions of the Income Tax ​‍​‌‍​‍‌​‍​‌‍​‍‌Act.

• Maintenance of Books of Accounts

1. Requirement: The Limited Liability Partnerships (LLPs) should record transactions in their books of accounts either on a cash or accrual basis at their office where they are registered.

2. Inspection: The records should be maintained for a period of not less than 8 years and should be accessible to the inspection of ​‍​‌‍​‍‌​‍​‌‍​‍‌partners.

• Designated Partner KYC

1. Form: DIR-3 KYC

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

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

4. Required Documents: PAN Card, Aadhar Card, Address Proof, DSC.

• GST Compliance (if applicable)

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

2. Reconciliation Statement (GSTR-9C): Compulsory to all LLPs having turnover more than 2 crores ₹.

• Estimated Costs for Annual Compliance

1. Basic Compliance Package: 10,000₹ - 15,000₹ yearly (covers filing of Form 11, Form 8, and ITR).

2. Advanced Compliance Package: 20,000₹ - 50,000₹ annually (covers tax audit, GST compliance, and extra advisory services).

3. Penalties for Late Compliance: 100₹ per day for ROC forms, possible penalties for late tax ​‍​‌‍​‍‌​‍​‌‍​‍‌filing.

• Package Offers

1. InstaBiz​‍​‌‍​‍‌​‍​‌‍​‍‌ filings offers to file your annual compliance for LLPs with us that will include the filing of Form 8 for LLPs, Form 11 of every LLP and DIR-3KYC for partners starting at just 4,000/-₹ + ​‍​‌‍​‍‌​‍​‌‍​‍‌GST.

2. Most service providers provide LLP’s annual compliance services starting from 10000₹- 50000₹ or above, depending on the services required and the levels of complexity involved.

• Key Points to Consider

1. Filing Deadlines: This is vital as a reminder of certain dates; DIR-3 KYC April 30th , Form 11 May 30th, Form 8 October 30th carry working late fees.

2. Professional Help: Professional compliance help reduce incidences of late or wrong compliance that might attract penalties.

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