Limited Liability Partnerships (LLPs) in India are required to comply with certain annual obligations and statutory requirements. The annual compliances for an LLP in India typically include the following:
Filing of Annual Return (Form 11): Every LLP is required to file an Annual Return in Form 11 within 60 days from the end of the financial year. The Annual Return includes details such as the number of partners, total contribution, changes in partners, registered office address, etc.
Filing of Financial Statements (Form 8): LLPs are required to file their financial statements, including the Statement of Accounts and Solvency, in Form 8 within 30 days from the end of six months of the financial year. The financial statements should be audited if the turnover exceeds a certain threshold.
Maintenance of Statutory Registers and Books: LLPs are required to maintain various statutory registers and books, such as the Register of Partners, Register of Charges, Minutes Book, etc. These records should be updated regularly and kept at the registered office of the LLP.
Appointment of Auditor: LLPs whose turnover exceeds a certain threshold or whose capital contribution exceeds a specified limit are required to get their accounts audited by a qualified Chartered Accountant. The LLP should appoint an auditor for the financial year who will conduct the audit and provide the necessary audit reports.
Income Tax Filings: LLPs are required to file income tax returns annually. The due date for filing income tax returns for LLPs is typically July 31st, unless extended by the government. LLPs are also required to obtain and maintain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
GST Filings: If an LLP is registered under the Goods and Services Tax (GST) regime, it needs to comply with GST provisions, including filing monthly, quarterly, and annual GST returns, as per the prescribed due dates.
Other Compliances: LLPs may have other compliance requirements based on the nature of their business activities, such as obtaining necessary licenses, complying with labor laws, etc. It is essential to understand and fulfill any specific compliance obligations related to the industry or sector in which the LLP operates.
Filing LLP Annual Return
Obtain the necessary information: Gather all the required information and documents for filing the Annual Return. This may include details such as the LLP's name, registered office address, partners' details, capital contribution, and changes in partners during the financial year.
Prepare the Annual Return (Form 11): Use Form 11 to prepare the Annual Return. This form can be downloaded from the official website of the Ministry of Corporate Affairs (MCA). Fill in all the relevant information accurately.
Attach supporting documents: Attach the necessary supporting documents with the Annual Return. These may include the LLP agreement, details of changes in partners, details of contribution received during the financial year, and any other documents as required.
Get the Annual Return certified: The Annual Return needs to be certified by either a designated partner or a practicing Chartered Accountant, Company Secretary, or Cost Accountant.
File the Annual Return: Once the Annual Return is prepared and certified, it needs to be filed with the Registrar of Companies (RoC) within 60 days from the end of the financial year. The filing can be done electronically on the MCA portal (www.mca.gov.in) using the LLP's login credentials.
Pay the filing fees: Pay the requisite filing fees for submitting the Annual Return. The fees depend on the LLP's capital contribution and are payable online on the MCA portal.
Obtain the acknowledgment: After successful submission, the MCA portal generates an acknowledgment receipt. Download and save the receipt for future reference.
Filing of Statement of Account & Solvency
Gather financial information: Collect all the necessary financial information and documents, such as the LLP's balance sheet, profit and loss statement, bank statements, and other relevant financial records.
Prepare the Statement of Account and Solvency (Form 8): Use Form 8 to prepare the Statement of Account and Solvency. You can download Form 8 from the official website of the Ministry of Corporate Affairs (MCA). Fill in the required financial details accurately.
Get the Statement of Account and Solvency certified: The Statement of Account and Solvency should be certified by either a designated partner or a practicing Chartered Accountant, Company Secretary, or Cost Accountant.
File the Statement of Account and Solvency: Submit the Statement of Account and Solvency with the Registrar of Companies (RoC) within 30 days from the end of six months of the financial year. The filing can be done electronically on the MCA portal using the LLP's login credentials.
Pay the filing fees: Pay the requisite filing fees for submitting the Statement of Account and Solvency. The fees depend on the LLP's capital contribution and are payable online on the MCA portal.
Obtain the acknowledgment: Once the filing is successful, the MCA portal generates an acknowledgment receipt. Download and save the receipt for future reference.
Filing LLP Annual Return
Obtain the necessary information: Gather all the required information and documents for filing the Annual Return. This may include details such as the LLP's name, registered office address, partners' details, capital contribution, and changes in partners during the financial year.
Prepare the Annual Return (Form 11): Use Form 11 to prepare the Annual Return. This form can be downloaded from the official website of the Ministry of Corporate Affairs (MCA). Fill in all the relevant information accurately.
Attach supporting documents: Attach the necessary supporting documents with the Annual Return. These may include the LLP agreement, details of changes in partners, details of contribution received during the financial year, and any other documents as required.
Get the Annual Return certified: The Annual Return needs to be certified by either a designated partner or a practicing Chartered Accountant, Company Secretary, or Cost Accountant.
File the Annual Return: Once the Annual Return is prepared and certified, it needs to be filed with the Registrar of Companies (RoC) within 60 days from the end of the financial year. The filing can be done electronically on the MCA portal using the LLP's login credentials.
Pay the filing fees: Pay the requisite filing fees for submitting the Annual Return. The fees depend on the LLP's capital contribution and are payable online on the MCA portal.
Obtain the acknowledgment: After successful submission, the MCA portal generates an acknowledgment receipt. Download and save the receipt for future reference.
Some Key points about LLP
Legal Structure: LLP is a hybrid business structure that combines the features of a partnership firm and a limited liability company. It offers the advantages of limited liability to its partners while allowing them to actively participate in the management and operations of the business.
Separate Legal Entity: LLP is a separate legal entity distinct from its partners. It can own property, enter into contracts, sue or be sued in its own name, and carry out business activities independently.
Limited Liability: One of the significant advantages of an LLP is that partners have limited liability. They are not personally liable for the debts and obligations of the LLP. The liability of partners is generally limited to their agreed contribution in the LLP.
Partner's Liability: However, partners can be held personally liable for their own wrongful acts or misconduct. Additionally, personal guarantees provided by partners can also lead to personal liability.
Number of Partners: An LLP must have a minimum of two partners. There is no maximum limit on the number of partners. The partners can be individuals or other corporate entities, such as companies or LLPs.
Partnership Agreement: An LLP is governed by an LLP Agreement, which outlines the rights, duties, and obligations of the partners, profit-sharing ratios, decision-making processes, and other important aspects of the partnership. This agreement provides flexibility for partners to define their own terms, subject to the provisions of the LLP Act.
Management and Decision Making: Partners in an LLP have the flexibility to manage the business and make decisions collectively or appoint designated partners to manage the affairs of the LLP. Designated partners are responsible for ensuring compliance with statutory requirements and filing necessary documents with the Registrar of Companies (RoC).
Compliance Requirements: LLPs are required to comply with various statutory requirements, including filing annual returns, financial statements, and other necessary documents with the RoC. LLPs may also be subject to other sector-specific regulatory compliances and tax obligations.
Taxation: LLPs are taxed as separate legal entities. The income of an LLP is subject to income tax, and partners are not individually taxed on the LLP's income. However, partners are required to report their share of LLP's income in their personal income tax returns.
Transferability of Ownership: LLPs provide limited flexibility in terms of transferring ownership interests. The transfer of ownership requires compliance with the provisions mentioned in the LLP Agreement and often requires the consent of all partners.