BUSINESS REGISTRATION
Limited Liability Partnership COMPLIANCE
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OVERVIEW
LIMITED LIABILITY PARTNERSHIP
A distinct legal entity, the Limited Liability Partnership, has been registered with the Ministry of Corporate Affairs (MCA) of India. For an LLP to be registered, there must be a minimum of two partners, one of whom must be both a resident and an Indian citizen. An LLP’s partners are responsible for keeping a correct accounting record, filing an income tax return, and submitting an annual return to the Ministry of Corporate Affairs each fiscal year.
To create a Limited Liability Partnership, the returns must be filed regularly in order to maintain compliance and avoid harsh legal penalties for non-compliance. A limited liability partnership must comply with a few regulations each year, which is significantly less than private limited businesses are required to do. The fines, nevertheless, are rather high. The penalty for non-compliance may only amount to INR 1 lakh for a Private Limited Company, while it may amount to INR 5 lakh for an LLP.
Annual Compliances of LLP
ANNUAL COMPLIANCES OF LLP
The annual compliance of private limited corporations should be regarded seriously, much like other enterprises. A company’s compliance documents must be submitted on time or earlier. Here are a few requirements for private limited companies that you should pay attention to.
Statement of Accounts and Solvency
Form-8 must be completed by each LLP to prepare and conclude its financial year’s books. October 30th of each fiscal year is the deadline for submitting Form 8. Financial statement information, along with other declarations, is included in Form-8.
Annual Return
Annual Return is filed annually with the Ministry of Corporate Affairs in an electronic form (MCA). LLP’s annual report is submitted on Form 11. Annual returns must be filed within 60 days of the end of the fiscal year. Form 11 must have two authorized partners’ digital signatures.
DIR-3 KYC
Every designated LLP partner must submit a DIR-3 eKYC annually by September 30th at the latest.
Audit
The amount of the LLP’s contribution and the threshold limit for turnover determine the audit. It is required to undertake an audit of the LLP if its yearly revenue exceeds Rs. 40 lakh or its contribution exceeds Rs. 25 lahks.
Income tax return
LLP must file an income tax return every year. The date of filing a return depends on whether an audit is applicable or not. If a tax audit is required, file your income tax return by September 30th; otherwise, do so on July 31st of each year.
Documents Needed
DOCUMENTS NEEDED FOR ANNUAL FILING OF COMPLIANCE FOR LLP
- Bank statements of that financial year of all the bank accounts opened in the name of LLP.
- Credit Card statement if partners incur income on behalf of the LLP.
- Purchase and Sale Invoices.
- Expense Invoices.
- Copy of GST, VAT, and other tax returns (If any).
- Copy of TDS challan deposited (If any).
CHECKLIST
CHECKLIST FOR THE ANNUAL COMPLIANCE
- It is necessary to submit annual reports to the Registrar of Companies (ROC).
- Annual returns must be submitted with the LLP Form 11 and filled out in accordance with its specifications.
- This must be submitted within 60 days of the end of the financial year. Every year on May 30th, this could be done.
- Every LLP that is registered must comply with the LLP’s yearly compliance requirements, even if there is no marketing activity. It must be obtained regardless of whether a business bank account is present or not and whether the LLP has been closed.
BENEFITS
BENEFITS OF ANNUAL COMPLIANCE OF LIMITED LIABILITY PARTNERSHIP
Transparency and Agreement
Annual filing is significant as it is necessary to transform an LLP into a Private Limited Corporation. To make the process of converting an LLP into a private business as simple as possible, the annual compliance records are submitted each year. Annual compliance must be filed on time, even if the LLP has been closed. The registrar verifies that the annual compliance with the required fee has been fulfilled prior to the conversion and settlement of an LLP.
Reliability
The MCA makes the status of the LLP’s yearly compliances available on its official website. The timely submission of the yearly compliance is essential to the Company’s ethics and morality.
Alert Creditworthiness
The parties investigate the compliances filed by the LLP to determine its financial standing before entering into any contract with it. The parties’ net worth is disclosed in the record of the financial statements.
Prevent penalties
The partners of the LLP are shielded from being declared in default and from harsh penalties by the regular filing of yearly compliances. It prevents any interactions with the LLP from disqualifying someone.
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