Important LLP Compliance – Due Date & Penalty

LLP Compliance Calendar | Compliance Calendar for LLP

LLP Compliance Calendar:

This article covers the Mandatory Compliances to be followed by a LLP under Registrar of Companies, Ministry of Corporate Affairs, mentioned under LLP Act, 2008 and Income Tax Act, 1961 including Tax audit provisions.  Some key points are also given regarding LLP

Definition(s)

Define Limited Liability Partnership (LLP) u/s 2(n) of LLP Act 2008: “Limited Liability Partnership” means a partnership formed and registered under Limited Liability Partnership Act, 2008.

Define Foreign Limited Liability Partnership (FLLP) u/s 2(m) of LLP Act 2008:

“Foreign Limited Liability Partnership” means a limited liability partnership formed, incorporated or registered outside India which establishes a place of business within India;

In general terms, LLP is a Corporate entity and governed by the laws and regulation prescribed by the Limited Liability Partnership Act, 2008 (LLP Act, 2008).

“Any two or more persons associating for carrying on a lawful business with a view to profit may set up an LLP.”

Regulatory Authority:

Registrar of Companies (ROC), Ministry of Corporate Affairs (MCA)  

Mandatory Compliances for an LLP

Registered LLPs  with the Ministry of Corporate Affairs (MCA) needs to file the following mandatory compliance requirements :

1. Filing of Annual Return – LLP Form-11
2. Filing Statement of Account & Solvency – LLP Form-8 (Statement of Statement of the Accounts/Financial Statements)
3. Filing of Income Tax Returns  

Brief Overview of the Mandatory Compliances:

Filing LLP Annual Return

Annual Return or Form 11 is a summary of an LLP’s Partners and indication of change in the management.

Every LLP is required to file Annual Return in Form 11 to the Registrar within 60 days of closer of financial year i.e. has to be filed on or before 30th May every year.

Filing of Statement of Account & Solvency

(Filing of Annual Accounts/ Statement of Accounts/ Financial Statements/ P&L & Balance Sheet)

1. LLP must maintain proper books of account. The accounts may be on cash basis or accrual basis.
2. Statement of Solvency (Accounts) needs to be prepared every year ending on 31st March.
3. LLP Form – 8 should be filed with the Registrar of Companies on or before 30th October every year.
4. It should be noted that LLPs / FLLPs whose annual turnover exceeds Rs. 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakh are required to get their accounts audited by auditor of the LLP/ FLLP mandatorily.

Tabular classification of Mandatory ROC Return of LLP

The following filings are mandatory for all LLPs irrespective of activity. In addition to the below, a LLP having GST registration would have to file GST returns every month.

LLP Form 11

Annual return filing under form 11 is a summary of all the designated partners like whether there are any changes in the management of the LLP or not. Every LLP is required to file annual return in Form 11 to the Registrar of companies within 60 days from the closure of financial year i.e. annual return have to be filed on or before 30th May every year. Accordingly for the financial year 2017-2018, 30th May, 2018 is the last date for filing of annual return under form 11.

LLP Form 8

Every LLP is required to prepare and close its accounts until the 31st March every year. LLP are required to maintain the Books of Accounts in Double Entry System and has to prepare a Statement of Accounts every year ending on 31st March. From 8 is to be filed, by at least two Designated Partners, with the Registrar on or before 30th October every year. Accordingly for the current financial year, 30th October, 2018 is the last date for filing statement of accounts for the financial year 2017-2018.

Income Tax Return

Every LLP has to file Income Tax Returns every year. LLP being a separate legal entity, apart from the partner’s income tax return, you have to always file the LLP Income tax return. The last date of filing of income tax return for LLP is 31st July or 30th September, as the case may be. If LLP’s books of accounts are not required to be audited, than, due date for filing income tax return would be 31st July and if LLP is covered under tax audit i.e. books of accounts are to be audited, due date for filing Income tax return would be 30th September.

Audit for LLP

The following audit by a practicing Chartered Accountant would be required for a LLP.

Tax Audit

Every LLP whose turnover exceeds INR 1 Cr. in case of a business or INR 50 Lakh in case of a profession, is required to get its books of accounts tax audited under section 44AB of the Income-tax Act. Such audit will have to be completed and filed by 30th September.

LLP Act

It may be noted that only those LLP whose annual turnover exceeds Rs. 40 lakhs or whose contribution exceeds Rs. 25 lakhs are required to get their accounts audited.

Certificate from Company Secretary

In case of LLPs with turnover more than five crore rupees in a financial year or contribution more than fifty lakh rupees, the annual return filed under form 11 needs to be certified by a Company Secretary in Practice.

Penalty for Late Filing

If there is a delay in filing Form 8 and 11 of LLP, penalty of Rs. 100 per day per form is payable from the due date of filing return till the date actual return is filed.

In case of late filing income tax return, a penalty of Rs.5000 would be applicable for returns late filed between 1st August and 31st December of the assessment year. A penalty of Rs.10,000 will be applicable on return filed after 31st December of the same assessment year.

Privileges for LLP in comparison to a Private Limited company :

1. Exemptions from maintenance of Minutes book, Statutory Registers, and flexible tax rates etc.
2. No, AGM is not required for an LLP. AGM is a once in a year meeting for Shareholders of the Company. As there is no concept of shareholding in an LLP, no AGM is to be held.
3. Board meeting is generally associated with a Board of Directors meeting. There are no directors involved in an LLP, instead designated Partners run the business and are held responsible for compliances. Hence, Board of Partners meeting is suggested in case of an LLP firm.
4. There is no limit on maximum number of partners.

Some Key points about LLP:

Can an existing partnership firm be converted to LLP?

Yes, an existing partnership firm can be converted into LLP by complying with the Provisions of clause 58 and Schedule II of the LLP Act. ROC – Filings: Form 17 needs to be filed along with Form 2 for such conversion and incorporation of LLP.

Can an existing company be converted to LLP?

Yes, any existing private company or existing unlisted public company can be converted into LLP by complying with the Provisions of clause 58 and Schedule III and IV of the LLP Act. ROC- Filings: Form 18 needs to be filed with the registrar along with Form 2 for such conversion.

Can a listed company be converted to LLP?

No, only private / unlisted public company can be converted into LLP.

Financial Year of LLP Every LLP has to maintain uniform financial year (April to March) ending on 31st March of a year.

Is it mandatory to file the charge details to the registrar office?

It is not mandatory to file the charge details with the office of Registrar but the stakeholders can voluntarily file the same