Mandatory Annual Compliance Of Limited Liability Partnership | Ebizfiling

 


  Introduction 

 

All Limited Liability Partnerships that are registered in India must abide by a number of compliance that is mandated by the Ministry of Corporate Affairs (MCA). Along with ROC filing. LLPs must also comply with the filing requirements of Income Tax Returns. This article provides an overview of the mandatory annual compliance for LLP. But first, we will discuss about the benefits of filing annual compliance with the meaning of LLP.

 

 What Is A Limited Liability Partnership?  

 

The partners of an LLP experience the benefits of the flexibility of a partnership and limited liability like companies because an LLP is a hybrid form of business structure. It is governed by the Limited Liability Partnership Act, 2008. The death or removal of any director does not affect the existence of an LLP. Every year an LLP is necessary to comply with annual compliance.

 

 Benefits Of Filing Annual Compliance  

 

1. Filing annual compliance is an essential requirement for any LLP. Everybody has access to the Master Data of the LLP on the MCA portal, which displays the status of the LLP annual compliance. Compliance is a key factor in establishing how reliable a company is when granting loans or other requirements of a similar nature.

 

2. Companies have access to the forms filed by the LLP. As a result, while engaging in contracts or major projects, the investor will look into the financial value of the LLP. An investor or party can access the record of the LLP's financial statement and annual return.

 

3. The LLP can be declared inactive or issued default status in the event of a continuous failure to file a financial statement and annual returns. The partners can also be declared as default and prohibited from holding additional positions in an LLP or company. Therefore, an LLP must file the compliances in order to keep its status active. The regular filing also protects the LLP against hefty penalties and other fees.

 

4. Annual filing is essential for converting the LLP into any other company. The conversion task can be made simpler by regular compliance filing. In the event of LLP closure, the same holds true.

 

 Mandatory Annual Compliance 

 

Every financial year, all LLPs that are registered with the Ministry of Corporate Affairs (MCA) should submit annual returns and statements of accounts or financial statements. Regardless of whether it has conducted any business or not, an LLP must comply with annual compliance. There is 5 mandatory compliance for LLP, which are as follows:

 

  1. Filing of financial statement- Form 8 is filed by an LLP to file financial statements or statements of accounts. The partnership firm should prepare and close its accounts until the 31st of March every year. The form must be filed by at least 2 Designated Partners with the Registrar within 30 days from the closure of the financial year.

 

  1. Filing of annual returns- Form 11 is filed by an LLP to file an annual return. The form includes the summary of all the Designated Partners like whether there are any changes in the management of the LLP or not. The form must be submitted by the LLP with the Registrar within 60 days from the closure of the financial year.

 

  1. Filing of income tax returns- Every LLP has to file Income Tax Returns every year. The last date for filing ITR is 31st July. However, any LLP under tax audit is required to file its Income Tax Return by 30th September.

 

  1. Filing of DIR-3 KYC- Each designated partner for an LLP is needed to file Form DIR 3 KYC on for before 30th September of each financial year.

 

  1. Audit of the accounts of the LLP- It should be noted that only those LLPs whose annual turnover exceeds Rs. 40 lakhs or whose contribution exceeds Rs. 25 lakhs are required to get their accounts audited.

 

 

 Fines Of Non-Filing Of Annual Compliance By An LLP 

 

If there is a delay in filing Forms 8 and 11 of LLP, you will have to pay the penalty of Rs. 100 per day of default. One cannot close or wind up their LLP without the proper filing of annual accounts. Also, not complying with any of the mandatory requirements will lead to paying hefty penalties.

 

 

 

            

 

 

Comments

Post a Comment

Popular posts from this blog

All About Form AOC-4 and MGT-7 | Ebizfiling

Image
     Introduction     The annual report and audited financial statements that a company has to submit to the Ministry of Corporate Affairs on time or before the deadlines are referred to as "ROC filings." A company will be charged with a prescribed fine if it fails to file annual returns as specified by the Companies Act, 2013. In this article, we will focus on two types of annual compliance of Private Limited Company , namely AOC-4 for financial statements and MGT-7 for company annual returns. Both are submitted to the MCA within the allotted time frames of 30 days for AOC-4 and 60 days for MGT-7 following the Annual General Meeting (AGM).     What are Form AOC-4 and MGT-7?     Form AOC-4 is used to file a company's financial statements at the end of each financial year. This form is submitted to ROC. Financial statements are a tool that the Board of Directors and shareholders use to evaluate the performance of the company. The company only ...
Read more

How Professional Employer Organizations (PEO) are helpful for new emerging start-ups?

Image
  Introduction      Professional Employer Organizations (PEO) with experience in the local markets can assist the business to improve and grow. A person who wants to expand a freshly formed business in a foreign country needs some time to do market research, understand local consumer trends, and get to know the demands of the public. A PEO functions under the co-employment idea, which enables you to delegate tasks to multiple companies. In this blog, we will talk about- How PEO benefits your start-up?   What is a PEO (Professional Employer Organization)?      A full-service co-employment human resource outsourcing structure is referred to as a PEO ( Professional Employer Organization ). They usually act as professional employers for the employees of their clients.  When the client company reports its salary using the PEO's federal employer identification number (FEIN), employee obligation is transferred to the PEO.  In this arr...
Read more

Incorporation of a new Limited Liability Partnership | Ebizfiling

  Introduction     Many individuals desire to become their own boss and gain freedom by starting their own businesses but it requires a lot of effort to do so. Limited Liability Partnerships are the right choice as it provides the features of the company structure and partnership firm. Incorporating your business as LLP is a very simple process as it consists of 5 steps. Keep reading this blog and you will get to know the process of incorporating a new LLP.     What is a Limited Liability Partnership?     A Limited Liability Partnership is a combination of a company structure as well as a partnership firm. LLP also limits the liability of partners to the capital amount contributed by them and that is governed by LLP Agreement. The incorporation, compliance and other regulation are governed by the Companies Act, 2013 and LLP agreement created at the time of LLP registration as per the Limited Liability Act, 2008.     Requirement for incorpor...
Read more