A Limited Liability Partnership (LLP) is a type of business entity that combines the benefits of a partnership with the limited liability of a corporation. LLP or Limited Liability Partnership is a separate legal entity, which means that it has its own legal identity distinct from its partners. As with any other type of business entity, an LLP is subject to a number of compliances. In this write-up, we are going to discuss about Form 11.
Also, we will discuss the various compliances that an LLP must comply with.
- LLP Agreement: The first compliance requirement for an LLP is to execute an LLP agreement, which is a legal document that sets out the rights and obligations of the partners, the profit-sharing ratio, and the procedures for decision-making. The LLP agreement must be filed with the Registrar of Companies (ROC) within 30 days of the formation of the LLP.
- PAN and TAN: The next compliance requirement is to obtain a Permanent Account Number (PAN) & Tax Deduction & Collection Account Number (TAN) for the LLP. PAN is mandatory for all entities that engage in business or profession, while TAN is required for deducting and collecting tax at source.
- Annual Compliance: LLPs are required to comply with various annual compliances, including filing of Annual Return and Statement of Accounts and Solvency. The Annual Return provides details of the partners, their contributions, and changes in the management of the LLP, while the Statement of Accounts and Solvency gives a snapshot of the financial health of the LLP.
- Audit Requirements: The LLP Act, 2008, mandates that all LLPs whose annual turnover exceeds Rs. 40 lakhs/whose contribution exceeds Rs. 25 lakhs must get their accounts audited by a CA. In case the LLP has a turnover of less than Rs. 40 lakhs, and the contribution is less than Rs. 25 lakhs, the LLP is not required to get its accounts audited.
- Income Tax Compliances: An LLP is required to file its income tax return every year, irrespective of the amount of income earned/the amount of tax payable. The LLP is also required to obtain a tax audit report from a chartered accountant if the turnover of the LLP exceeds the prescribed limit.
- GST Compliances: If the LLP is involved in the supply of goods or services, it must comply with the GST regulations. The LLP must register for GST, file GST returns, and pay GST on time to avoid penalties.
- Maintenance of Statutory Registers: LLPs are required to maintain various statutory registers, including Register of Partners, Register of Charges, and Register of Accounts. These registers must be updated regularly and made available for inspection by the partners and authorities.
- Compliance Certificate: LLPs whose annual turnover exceeds Rs. 40 lakhs/whose contribution exceeds Rs. 25 lakhs must obtain a compliance certificate from a practicing company secretary. The compliance certificate certifies that the LLP has complied with all the provisions of the LLP Act, 2008, and the rules made thereunder.
- Compliance with Other Laws: LLPs must also comply with other laws that are applicable to their business, such as the Companies Act, 2013, the Foreign Exchange Management Act, 1999, and the Information Technology Act, 2000. Failure to comply with these laws can result in penalties and legal proceedings.
Annual Return Filing through FORM 11
It is a necessary act to file for annual return (FORM-11) in case of Limited Liability Partnership (LLP), under the LLP Act 2008. Filing of FORM-11 is a compulsory annual compliance to be filed every year with the Ministry of Corporate Affairs (MCA) to meet the compliance, in order to avoid penalty. Irrespective of the profit earned or total income earned in any business activity, one has to file FORM-11 in order to avoid hefty penalty.
In case any person fails to file return within the stipulated time limit, then he has to end up in paying a penalty of Rs 100 each day for delay. All the annual compliances relating to LLP is filed online and every track record is maintained by the MCA. Thus, it is pertinent to mention that due no scope of resubmission in the FORM-11 filing, all the details must be filled in the appropriate format with true and genuine information of the company.
Last Date of Filing Annual Return through FORM 11
Within 60 days of the financial year’s end, LLP Form 11 is required to be submitted to MCA official website. As the end of the fiscal year for all LLPs is March 31st, the LLP Annual Return Form 11 is due on May 31st of each year.
Checklist of Documents Required For Filing of Annual Return through FORM 11
The following details and paperwork must be submitted with the LLP Annual Return:
- Identity Number for LLP
- Name of the LLP
- The LLP’s registered office address
- The LLP’s Business Classification (Business, Profession, Service, Occupation, Others)
- Main business ventures of the LLP
- Information about the LLP’s Designated Partners and Partners
- The amount of the LLP’s partners’ responsibility to contribute
- Amount investment received by all LLP partners
- Summary of Partners and Designated Partners
- Details of the LLP and or company in which the Partner or Designated Partner is a Director or Partner, if any (It is required to attach this detail in case any Partner,
- Designated Partner is a partner in any LLP and/or Director in any company) Particulars of penalties imposed on the LLP, if any Particulars of compounding offences, if any
To File The Annual Return For A Limited Liability Partnership (LLP) In India, You Will Need To Follow The Steps Outlined Below:
Step 1: Collect Necessary Information
Gather all the necessary information required to file the annual return. This may include information such as the LLP’s name, registered address, partners’ details, capital contribution, financial statements, and other relevant information.
Step 2: Prepare the Necessary Documents
Prepare the documents required to file the annual return, including the Statement of Account and Solvency and the Annual Return. These documents should be prepared in the prescribed format as per the LLP Act, 2008 and the LLP Rules, 2009.
Step 3: Verify the Information
Ensure that the information provided in the documents is accurate and up-to-date. Any errors or discrepancies in the information provided can lead to delays in the filing process.
Step 4: Get the Documents Digitally Signed
Get the documents digitally signed by a designated partner of the LLP or an authorized signatory. The digital signature should be obtained from a licensed Certifying Authority (CA) in India.
Step 5: File the Annual Return
Once the documents are prepared and signed, file the annual return online with the Ministry of Corporate Affairs (MCA) using the LLP Form 11. The LLP Form 11 can be filed through the MCA21 portal (www.mca.gov.in).
Step 6: Pay the Filing Fee
Pay the required filing fee for the LLP Form 11. The fee will depend on the LLP’s capital contribution and the date of filing.
Step 7: Receive Confirmation
After successful submission of the LLP Form 11 and payment of the filing fee, you will receive a confirmation of the filing. Keep a copy of the confirmation for your records.
Thus to conclude, compliance with the above-mentioned requirements is essential for an LLP to maintain its legal status and avoid penalties. LLPs must ensure that they comply with all the applicable laws and regulations, and seek professional advice if necessary. Non-compliance with the compliances can lead to legal and financial consequences, and it is essential to take timely and appropriate measures to avoid them. Moreover, it is vital to note that the LLP Form 11 should be filed within 60 days of the close of the financial year. Failure to file the annual return can result in penalties and other legal consequences.
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