LLP Compliance

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LLP Annual Compliance: A Guide for Limited Liability Partnerships

For a Limited Liability Partnership (LLP) in India, timely LLP annual compliance is crucial to avoid significant penalties. While the compliance burden is less extensive than for private limited companies, the fines for non-compliance can be substantial. FileMyFirm provides expert services to help your LLP meet its regulatory obligations efficiently and effectively.

Mandatory LLP Return Filing Requirements

Every LLP is legally required to file specific returns with the Ministry of Corporate Affairs (MCA). The responsibility for these filings lies with the designated partners.

LLP Annual Return (Form 11): This form provides a summary of the LLP’s management, including partner details and contributions.
- Due Date: May 30th each year.
- Penalty for Non-Filing: ₹100 per day of delay until the return is filed.
Statement of Accounts & Solvency (Form 8): This form contains the LLP’s financial details, including its assets, liabilities, and a declaration of solvency. It must be certified by a Chartered Accountant or Company Secretary.
- Due Date: October 30th each year.
- Penalty for Non-Filing: ₹100 per day of delay.

LLP Tax and Audit Requirements

In addition to MCA filings, LLPs must adhere to income tax and audit obligations.

LLP Income Tax Return (ITR-5): Every LLP must file its income tax return using Form ITR-5, regardless of its turnover or profitability.
- Due Date (Non-Audit Cases): July 31st each year.
- Due Date (Audit Cases): October 31st each year.
LLP Tax Audit: A tax audit is mandatory for an LLP if:
- Its annual turnover exceeds ₹40 lakh.
- Its capital contribution exceeds ₹25 lakh.
- Due Date for Audit Report: October 31st each year.

Penalties and Benefits of Compliance

Failing to meet LLP compliance requirements can lead to severe consequences. In addition to the daily penalties for late filings, prolonged non-compliance can result in the LLP being declared defunct and a maximum penalty of up to ₹5 lakh.

Conversely, timely compliance provides several benefits:

Enhanced Credibility: Meeting LLP annual compliance standards builds credibility, which is essential for securing loans and attracting partners or investors.
Avoidance of Penalties: Adhering to deadlines prevents late fees and financial penalties.
Legal Standing: Ensures the LLP remains active and in good legal standing, simplifying future processes like conversion or dissolution.

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FileMyFirm offers comprehensive support to streamline your LLP annual filing process. Our experts assist you with preparing accurate documents, obtaining necessary certifications, and ensuring all forms are filed on time. By choosing FileMyFirm, you can focus on your core business activities while we handle the complexities of LLP compliance.

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Frequestly asked questions ( FAQ )

What is LLP Compliance and what law governs it?

LLP Compliance refers to the mandatory set of legal and regulatory requirements that a Limited Liability Partnership (LLP) must fulfill annually and on the occurrence of specific events.

The compliance requirements for an LLP in India are primarily governed by the Limited Liability Partnership Act, 2008. All regulatory filings are submitted to the Ministry of Corporate Affairs (MCA).

What are the mandatory Annual ROC Filings for an LLP and their due dates?

Every LLP is required to file two key annual forms with the Registrar of Companies (ROC) under the MCA, regardless of their turnover or profit:

Filing Requirement	Relevant Form	Due Date
Annual Return	Form 11 (Statement of Annual Return)	May 30th each year
Statement of Accounts & Solvency	Form 8 (Statement of Accounts and Solvency)	October 30th each year

What are the key Tax and Audit requirements for an LLP?

In addition to ROC filings, LLPs must comply with Income Tax obligations:

Income Tax Return (ITR): Every LLP must file its Income Tax Return using Form ITR-5, irrespective of turnover or profitability.
- Due Date (Non-Audit Cases): July 31st each year.
- Due Date (Audit Cases): October 31st each year.
Mandatory Tax Audit: A tax audit is required if the LLP’s annual turnover exceeds ₹40 lakh or its capital contribution exceeds ₹25 lakh. The audit report must be submitted by October 31st.

What are the penalties for failing to meet LLP compliance deadlines?

LLP compliance deadlines are strict, and the penalties for late filing can be severe, compounding quickly over time:

Daily Penalty: For both the Annual Return (Form 11) and the Statement of Accounts & Solvency (Form 8), the penalty for delay is ₹100 per day for each form until the default is rectified.
Maximum Penalty: Prolonged non-compliance can lead to a maximum penalty of up to ₹5 lakh per form.
Other Consequences: Continued non-compliance can lead to the LLP being declared defunct and partners losing the benefits of limited liability.

What are Event-Based Compliances for an LLP?

Event-Based Compliances are filings required only when a specific change or event occurs within the LLP, such as:

Change in the LLP agreement.
Change in the details of designated partners.
Change in the LLP’s registered office address.
Change in the name of the LLP.