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Annual Compliances of LLP – Due dates, forms and penalties

Annual Compliances of LLP - Due dates, forms and penalties

LLP (Limited Liability Partnership) came into effect with the introduction of the Limited Liability Partnership Act, 2008. The concept of LLP is new in India. The nature of an LLP resembles both company and a partnership. It incorporated the limited liability aspect of the company at the same time provides the flexibility of a partnership firm. The annual compliances of LLP are lesser in number as compared to a private limited company.

ANNUAL COMPLIANCES OF LLP

The annual compliances applicable to LLP can be categorized as:

  1. Annual Filings with ROC and Compliances
  2. GST Compliances
  3. Income Tax Compliances

Annual Filings with ROC and Compliances

We have explained the ROC annual filings and compliances in detail below:

LLP Agreement (Form-3)

An LLP within 30 days of incorporation must file the LLP Agreement in Form 3 on the MCA 21 portal. In case of failure to do so late fees of Rs. 100 per day shall be levied.Annual Compliances of LLP - Auditor Appointment

Auditor Appointment

If the turnover of an LLP is more than Rs. 40 Lakhs or if its capital contribution is more than Rs. 25 Lakhs, then it must appoint an Auditor. We need to remember that the annual compliances of LLP are reported in the audit report.

Annual Return (Form-11)

  • Like every company, an LLP must also file an annual return with the MCA. Such a return is filed in Form-11
  • Form-11 contains details of partners, capital contributions. It is to be noted that even if an LLP is not carrying out any business activity it must file Form 11
  • The due date of filing Form-11 is within 60 days of the end of the financial year i.e. 30th May of the assessment year

Statement of Account and Solvency (Form – 8)

  • Like all corporate and business entities LLPs are also required to maintain their books of accounts
  • Form 8 of LLP provides all details of books of accounts and their financial position
  • If the turnover of an LLP during the year is less than Rs. 40 Lakhs, the declaration of the same must also be made in form 8 of LLP
  • If the turnover of an LLP is more than Rs. 40 Lakhs or if its capital contribution is more than Rs. 25 Lakhs, then Form-8 of LLP must be certified by the auditor
  • The LLPs are required to file Form-8 by 30th October of the assessment year

We need to remember that Form 8 and Form 11 are a critical part of annual compliances of LLP and in a way only compliances.

Income Tax Compliances

An LLP must also comply with the provisions of the Income Tax Act, 1961. As per the provision of the Act, every LLP even if it has no income must file its Income Tax Return within the due date. Annual Compliances of LLP include the following:

Income Tax Return

  • LLPs must file their return in Form ITR-5
  • Every LLP who is liable to get its accounts audited is required to file its Income Tax Return by 30th September of the assessment year
  • LLPs who are not liable to audit are required to file their Income Tax Return by 31st July of the assessment year.

Tax Deducted Return (TDS Return)

  • Every LLP must deduct tax at the rate prescribed by the Income Tax Act, 1961, while making a specified payment such as salary, rent, professional fee, etc.
  • LLPs deducting such tax must also deposit the same by the due date which is 7th of the following month
  • LLPs are also needed to file various returns under different forms quarterly or monthly as the case may be, for tax deducted under various provisions
    For Example, return for tax deducted u/s 192B, for salary, is filed in Form 24Q

Tax Audit

  • Tax Audit refers to the examination and inspection of the Income Tax Return of any person for an assessment year
  • A tax audit is done to ensure whether financial statements submitted by a person give a true or fair view or not
  • Annual compliance of LLP includes audit if its turnover during the year is more than Rs. 1 crore in case of business
  • The above limit is Rs. 50 Lakhs in case of the profession

GST Compliances

If any LLP has opted for the GST registration at the time of incorporation or later. Then, an LLP must fulfil all GST related compliances. Some of the GST related compliances are as follows:

Monthly GST Return

  • An LLP, registered under GST, must file monthly or quarterly GST returns as applicable.
  • Normally, monthly GST returns include filing of GSTR-1 and GSTR-3B.
  • The due date of GSTR-1 is the 10 of the next month, while the due date of GSTR-3B is 20th of the next month.

Annual Return

  • All taxpayers are also required to file annual GST returns. The due date of filing such a return is 31 December of the next financial year.
  • The annual return is filed on the GST portal www.gst.gov.in in form GSTR-9.
  • A person whose turnover is more than Rs. 2 crores during the year is also required to file GSTR-9C.

Other Compliances

There are a few other annual compliances of LLP which need to be adhered to:

PAN & TAN Application

An LLP must obtain Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

Bank Account Opening

An LLP must also apply for the opening of a bank account as early as possible. As it is a separate legal entity, it is required that it conduct its business operation through a Bank account.

Frequently Asked Questions (FAQ)

1. Is it mandatory to register a partnership agreement under LLP?

Yes, it is mandatory to get your agreement registered under LLP Act. It is by virtue of section 2(0) & (q), 22 and 23 of the Act.

2. What is the annual filing requirement of LLP?

Every LLP is required to furnish Form 8 and Form 11 annually. These are basic requirements for annual compliances of LLP. Form 11 of LLP has to be filed within 60 days of the close of the financial year. Form 8 of LLP has to be filed within 30 days from the end of 6 months of the financial year.

3. Does LLP financial year have to be for 12 months?

Yes, it has to be for 12 months. If it is new LLP incorporated on or after 1st October, then it can take 18 months as the first year.

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