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Annual Compliance of LLP

Annual Compliance for Private Company

Ensure your private company stays on track with BusinessAid's Annual compliance services. Our team of experts will guide you through the intricate process of meeting regulatory requirements and keeping your business in good standing. Don't let compliance issues derail your success—trust BusinessAid to handle the details while you focus on growth.

Importance of Annual Compliance for Private Companies

In India, a Limited Liability Partnership is an individual or separate legal entity registered with the Ministry of Corporate Affairs (MCAs). To register an LLP, there should be no more than two partners, one of whom must be an Indian citizen and a resident. An LLP's partners should be responsible for keeping a proper book of accounts, filing an Income Tax Return, and submitting an annual return to the Ministry of Corporate Affairs (MCA) every fiscal year.

In order to establish a Limited Liability Partnership (LLP), returns should be filed on a regular basis to ensure compliance and avoid significant penalties under the law for noncompliance. A Limited Liability Partnership must comply with only a few requirements each year, which is far less than the compliance requirements imposed on private limited businesses. However, the fines appear to be rather large. Noncompliance may result in penalties of up to INR 5 lakh for an LLP, whilst a Private Limited business may face only INR 1 lakh.

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Partnerships with limited liability must file their Statement of Account and Solvency within thirty (30) days of the end of the sixth (6) month of the fiscal year, and their Annual Return within sixty (60) days of the end of the fiscal year. Unlike corporations, limited liability partnerships are required to maintain a fiscal year from April 1st to March 31st. As a result, the Statement of Accounts and Solvency must be filed on or before October 30th of each fiscal year, and the annual return for LLPs is due on May 30th of each year, even if the LLP did not conduct any business during that fiscal year. Some annual filings are required regardless of whether the LLP has begun doing business or not.

Protection of Limited Liability Partnership

Significant Benefits: The powers of LLPs are as follows:

  1. Ability to sue and be sued.
  2. Ability to open a bank account.
  3. The ability to employ people.
  4. Powers to enter into any form of legal contract.
  5. In an LLP, one partner is not held responsible or liable for another partner's misbehaviour or negligence.
  6. An LLP's associates have the right to directly manage the business.
  7. An LLP provides limited liability protection for its owners.
  8. If the number of Partners falls below two, the solitary companion can still discover a new Partner to fill the gap.
  9. An LLP can have an unlimited number of partners after it has been established.
  10. If there is only one companion in an LLP, there is time to recruit a new one from outside.

 

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Checklist Specifications for Filing of Annual Compliance

  • Annual returns must be filed with the Registrar of Companies (ROC).
  • Annual returns must be accompanied and filled out according to the stipulated format of LLP Form 11.
  • This must be filed within 60 days of the end of the fiscal year.
  • This might be done on May 30th, each year.
  • Every registered LLP, regardless of marketing activity, should meet the LLP yearly compliance requirement.
  • It must also be determined whether the LLP has been closed and whether or not a business bank account exists.

Documents Needed for Annual Filing of Compliance for LLP

  • PAN Card & COI: PAN Card and Certificate of Incorporation of LLP
  • LLP Agreement: The LLP Agreement along with any supplementary agreement, if any
  • Financial Statements: Financial Statement of LLP duly signed by the Designated Partners
  • Digital Signature: DSC of all Designated Partners is required
  • LLP Identification Number: Verification
  • Name of the LLP: Proof of Title
  • Registered office address of the LLP: The documentation needed regards to Location
  • Business Classification of the LLP: Record of Business/ Service/Occupation/Others
  • Principal business enterprises of the LLP
  • Aspects of Designated Partners and Partners of the LLP
  • Total responsibility for the contribution of partners of the LLP
  • Total input supported by all partners of the LLP
  • Review of Designated Partners and Partners
  • Details of penalties imposed on the LLP, if any
  • Facts of intensifying offenses, if any
  • Features of LLP and or company in which Partners hold the position of Director/Partner.
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Annual LLP Compliance Registration Procedure

  • End to end assistance for LLP compliances.
  • We have expertise in developing the customized LLP annual compliance program for an LLP along with a constant reminder method and Keeps a solid track of your Legal LLP compliance.
  • We update on developments on adjustments according to the LLP Registration act 2008, which is of absolute significance.
  • We provide Free deliberation on the Business enterprise establishments.

Timeline

  • LLP Annual Filing: We require filing a necessary annual return for LLP with MCA and maintaining yearly compliance.
  • Annual Return Preparation: Need to make Annual return based on the financials and production during the previous financial year.
  • Annual Return Verification: Needed to prepare Annual Return based on specifications submitted and send for confirmation and approval.
  • Finalization: After endorsement, file Annual Return with the Ministry of Corporate Affairs adjacent to the necessary appendages.

Credentials for Assistance during Registration Procedure

Declarations Of Accounts And Solvency: 

All registered LLPs are expected to have their books of accounts in place and fill in data concerning the profit made, and other economic data in regards to sales, and submit it in Form 8, each year. Form 8 must be attested by the impressions/signatures of the designated partners and should also be certified by a practicing ‘chartered accountant’ or a practicing ‘company secretary’ or a practicing ‘cost accountant.’ Neglecting to file, the statement of accounts & solvency records within the designated due date will lead to a fine of INR ‘100’ per day. The due date to submit form 8 for the financial year 2017-18 is October 30, 2018.

Arranging Annual Return: 

Annual Returns are to be submitted in the designated Form-11. This Form is to be entertained as a summary of the management affairs of LLP. These are like numbers of partners, simultaneously with their names. However, form 11 has to be filed by May 30 every year.

 

Latest Tax Structure: Commencement 2020

The entrance limit of Rs 1 crore for a tax audit is proposed to be raised to Rs 5 crore with influence from AY 2021-22 (FY 2020-21) if the taxpayer’s cash records are restricted to 5% of the gross receipts or annual turnover, However, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments. For LLPs in mean tax audit is not required deadline, the due date for tax filing is July 31.

 

For LLPs which have certified indulged into any international transactions with associated buisiness or have undertaken particulat Domestic Transactions they are meant needed to file Form 3CEB. A practicing Chartered Accountant should verify this Form. Limited Liability Partnerships that are expected to submit this Form can do their tax filing by November 30. Moreover, LLPs should file their income tax return in Form ITR 5. This Form could be presented online via the income tax website with the help of the selected partner’s digital signature.

Tax Structure of LLP 2019-20: 30% -low

  • Overcharge:

    A surcharge shall extend the measure of income-tax at the rate of 12% of such tax, wherever total income exceeds Rs. 1 crore rupees. Mostly, the surcharge shall be subjected to marginal relief. It is where revenue exceeds Ra. 1 crore rupees, the total cost payable as income-tax. The tax does not pass the total amount payable as income-tax on total revenue of Rs. 1 crore rupees by higher than the amount of income that exceeds Rs. 1 crore rupees.

  • Health And Education Blueprint:

    The amount of income-tax and the mentioned surcharge, should be further increased by health and education cess measured at the rate of 4% of those income-tax and surcharge.

  • Alternative Merest Tax:

    Tax due by LLP cannot be less than 18.5% (raised by Surcharge and HEC) of “adjusted total income” as per ‘section 115JC’.

Privileges for LLP in corresponding to a Private Limited Company

  • Exceptions from the preservation of Minutes book, Statutory Registers, and adjustable tax rates.
  • AGM is not a mandate for an LLP. AGM is previously in a year gathering for Shareholders of the Company. As there is no theory of shareholding in an LLP, none AGM should be held.
  • The board meeting is commonly associated with a Board of Directors conference. There are no directors included in an LLP, instead of selected Partners run the business and are held accountable for compliances. Therefore, the Board of Partners meeting is suggested in the event of an LLP firm.
  • There is no boundary on the highest number of partners.

Understandings of Form 11: Detailed Synopsis

Form 11 is a Yearly return that is to be filled by all LLPs irrespective of turnover throughout the year. Even when an LLP does not convey out any services or business during the business year, Form 11 needs to be filed. Apart from Essential data about Name, Address of LLP, details of Partners/ Designated Partners, other information that need to be submitted are:

Total enrichment or contribution by/to partners of the LLP

Characteristics of notices obtained towards Penalties imposed / compounding offenses performed during the financial year which must be e-filed on the MCA gateway. The pre-fill option is available to reduce your efforts also.

Documents to be presented along with Form 11

  • Details of LLP and company in which partners/ designated partners (DP) are directors/ partners (It is mandatory to attach these details in case any partner/ DP is a partner in any LLP and director in any other company)
  • Any other information can be provided as an optional attachment to this e-Form
  •  

Understandings of Form 11: Detailed Synopsis

Form 11 is a Yearly return that is to be filled by all LLPs irrespective of turnover throughout the year. Even when an LLP does not convey out any services or business during the business year, Form 11 needs to be filed. Apart from Essential data about Name, Address of LLP, details of Partners/ Designated Partners, other information that need to be submitted are:

Total enrichment or contribution by/to partners of the LLP

Characteristics of notices obtained towards Penalties imposed / compounding offenses performed during the financial year which must be e-filed on the MCA gateway. The pre-fill option is available to reduce your efforts also.

Documents to be presented along with Form 11

  • Details of LLP and company in which partners/ designated partners (DP) are directors/ partners (It is mandatory to attach these details in case any partner/ DP is a partner in any LLP and director in any other company)
  • Any other information can be provided as an optional attachment to this e-Form
  •  

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