Annual Compliances for LLP

A Limited Liability Partnership (LLP) is a separate legal entity distinct from its partners. It is the duty of the partners of the LLP to keep a proper book of accounts of the LLP and file an annual return with the Ministry of Corporate Affairs (MCA). The compliances as prescribed in the case of an LLP are much lesser as compared to a private limited company and are obligatory for an LLP to avoid penalties and disqualifications. Here are the details of annual compliances to be made by an LLP as below:

Statutory Annual Audit of LLP

• Statutory Audit is not compulsory in each and every case of an LLP rather it depends upon the annual turnover and capital contribution of the LLP. Limited Liability Partnerships are required to get their accounts audited under the Limited Liability Partnership Act, 2008 where their annual turnover is more than Rs. 40 Lakhs or if the capital contribution is more than Rs. 25 Lakhs.
• In case you meet the above criteria, an audit for your LLP has to be conducted by a qualified practising Chartered Accountant.

Tax Audit of LLP

• Besides the statutory audit, if the turnover of the LLP exceeds Rs. 1 crore in the financial year, it will also be subject to tax audit as per the provisions of section 44AB of the Income Tax Act, 1961.
• However, there is a relaxation from tax audit up to a turnover of Rs. 10 crores where more than 95% of transactions in the LLP are in banking/ digital mode.
• Tax Audit is also conducted by a qualified practising Chartered Accountant and reported in Form No. 3CA-3CD on the Income Tax Portal.
• The due date of submission of the tax audit report is 30^th September following the end of the relevant financial year.

Filing of Income Tax Return of LLP

It is compulsory for an LLP to file the Income Tax Return every year irrespective of the turnover limit. Even if there is no turnover or income, the LLP is required to file its ITR. The due date for filing ITR of an LLP is as follows:

• Where the LLP is not liable for audit: 31^st July following the financial year
• Where the LLP is liable for audit: 31^st October following the financial year

Note: Limited Liability Partnership (LLP) shall file its ITR online in the prescribed form ITR-5 on the Income Tax Portal. The return so filed is to be verified by any designated partner by means of a digital signature certificate or by Aadhar authentication (OTP).

Other Annual compliances for LLP

Besides the above compliances, the MCA has prescribed two mandatory compliances for an LLP to be made every year as below:

• Filing of Annual Returns
• Filing of Annual Statement of Accounts

Annual Return of LLP

• Annual Return for an LLP is to be filed in the ‘Form-11’ as prescribed by the Ministry of Corporate Affairs (MCA).
• Form-11 is mandatory in nature
• Form-11 is to be filed within 60 days from the end of the relevant financial year. For example: For the year 2021-22, the due date of filing Form-11 shall be 60 days after 31^st March 2022 i.e. 30^th May 2022.

Statement of Accounts and Solvency of LLP

All LLPs are required to submit their financial data (statement of accounts) relating to the preceding financial year in Form-8 every year with MCA. The following points are to be noted in respect of Form-8:

• Form-8 must be duly attested by the signatures of at least 2 designated partners of the LLP
• Form-8 should also be certified by a practising CA/CS/CMA.
• Form-8 should be filed on or before 30^th October after the end of the relevant financial year.
• Failure to file Form-8/ Form-11 may lead to a penalty of Rs. 100 per day till the default continues.

Concluding Remark: Making timely compliances for an LLP is very important as it saves the LLP and its partners from penal consequences. Further, adherence to legal compliances makes it easier for an LLP while raising funds for their start-ups. So, if you are an LLP and want to excel in your business, don’t forget to make timely compliances prescribed for you.

For Annual LLP Compliances Services connect at 9660930417