Annual Compliance for Limited Liability Partnership (LLP)

For a Limited Liability Partnership (LLP), regular filing of returns is crucial to maintaining compliance and avoiding hefty penalties.

While LLPs have a lower compliance burden than private limited companies, failure to meet statutory requirements can result in substantial fines. For instance, while a private limited company may face penalties of up to INR 1 lakh, non-compliant LLPs could incur fines reaching INR 5 lakh.

At DC Management System, we understand the significance of adhering to LLP annual compliance requirements and offer comprehensive services to help LLPs meet their obligations efficiently.

Key Compliance Requirements for LLPs

LLPs are recognized as separate legal entities and must comply with specific regulations. The responsibility for ensuring compliance lies with the Designated Partners. The primary LLP compliance requirements include:

  • Maintenance of Proper Book of Accounts
  • Filing of Annual Return (LLP Form 11)
  • Filing of Statement of Accounts (LLP Form 8)
  • Filing of Income Tax Return (ITR-5)
  • Filing of Tax Audit Report (if applicable)

Ensuring compliance with these requirements helps maintain an LLP’s legal status, credibility, and financial transparency.

Maintenance of Proper Book of Accounts

LLPs must keep accurate financial records detailing transactions, profits, expenses, assets, and liabilities. Proper bookkeeping is essential for financial assessment and performance analysis.

Filing of Annual Return – LLP Form 11

LLPs must file Form 11 annually with the Ministry of Corporate Affairs (MCA). This form provides details such as the number of partners, their contributions, and changes in management.

Filing Deadline:

LLPs must submit Form 11 by May 30th of each year, within 60 days of the end of the financial year.

Penalties for Late Filing:

A penalty of INR 100 per day applies until the return is filed.

Filing of Statement of Accounts – LLP Form 8

LLPs must submit Form 8 annually to declare their financial position, including assets and liabilities.

Filing Deadline:

Form 8 must be filed by October 30th, within 30 days after six months from the financial year-end.

Certification Requirement:

Form 8 must be digitally signed by two designated partners and certified by a chartered accountant, company secretary, or cost accountant.

Penalties for Late Filing:

A penalty of INR 100 per day applies for non-compliance.

Audit and Tax Filing Requirements for LLPs

LLPs must comply with tax audit and income tax return (ITR-5) filing requirements under the Limited Liability Partnership Act, 2008, and the Income Tax Act, 1961.

Tax Audit Requirement:

LLPs with an annual turnover exceeding INR 40 lakh or a contribution exceeding INR 25 lakh must have their accounts audited by a practicing Chartered Accountant.

Note: From Assessment Year 2021-22, LLPs with a turnover of up to INR 5 crore may be exempt from audit under specific conditions (cash receipts and payments must not exceed 5% of total transactions).

Tax Filing Deadlines:

  • Without Tax Audit: July 31st
  • With Tax Audit: September 30th
  • International Transactions (Form 3CEB): November 30th

Filing of Income Tax Return (ITR-5)

LLPs must file Form ITR-5 to report their income, expenses, and tax liability.

LLP Annual Compliance Calendar

Form Type

Description

Due Date

Filing Authority

Form 8

Statement of Accounts

October 30th

MCA

Form 11

Annual Return

May 30th

MCA

ITR-5

Income Tax Return

July 31st / Sept 30th

Income Tax Department

Audit Report

Tax Audit (if applicable)

September 30th

Income Tax Department

Benefits of LLP Annual Compliance

Maintaining LLP compliance offers several advantages:

  • Enhances Credibility: Timely compliance improves an LLP’s reputation and aids in securing loans and partnerships.
  • Financial Transparency: Annual filings provide a record of financial health, attracting investors and stakeholders.
  • Avoids Penalties: Regular compliance prevents LLPs from being declared defunct or facing legal repercussions.
  • Simplifies Conversion & Closure: Proper filings facilitate LLP conversion or dissolution when required.

Why Choose DC Management System?

At DC Management System, we simplify the LLP compliance process by offering expert guidance and hassle-free documentation. Our services include:

  • Document preparation & digital signature assistance
  • Professional certification from qualified experts
  • Timely reminders & submission support
  • Error-free filing to prevent penalties

Stay compliant and penalty-free with DC Management System.

Get started today to ensure smooth LLP annual compliance.

 

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