Annual Compliance

Annual Compliances For LLP

What is the Annual Compliance of Limited Liability partnership (LLP)?

Each & Every LLP are required to maintain its books of accounts on cash basis or accrual basis. Other relevant documents like incorporation document, names of partners and changes made, proof of fee payment, statement of account & solvency & annual return filed by LLP should also be kept at its registered office.

There are three mandatory compliance requirements to be followed by LLP’s

• Filing of Annual Return (FORM -11).

• Filing of Statement of the Accounts or Financial Statements. (FORM-8)

• Filing of Income Tax Returns. (ITR-5)

What is LLP Form -11?

LLP Form -11 is an Annual Return which is filed by the Every LLPs irrespective of turnover during the preceding financial year. This form -11 needs to be filed by every LLPs whether it does not carry out any operations or business during the financial year.

Form-11 declare basic information like Name, Address of LLP, Details of Partners/Designated Partners and total contribution by/ to partners of the LLP with the details of notices received towards Penalties imposed / compounding offences committed during the financial year.

What is LLP Form-8?

LLP Form -8 is a statement of Account and solvency. This form declares the LLP's financial transactions and financial position during the financial year, including its turnover, whether above or below 40 Lakhs.

Penalty as per provision of LLP Act:

Every LLP declares their Income and Expenditure and other details of the Company Annually to the Income Tax Department and Registrar of Companies. In the case LLP aborts to file the return of LLP Form-11 and Form -8, then penalty will be imposed with the rate of 100 per day and such penalty will applicable from the due date till the date actual return will be filed.

Due date to file various FORM of compliance:

Form LLP 11 to be filed within 60 days from the closure of financial year and LLP has to close its financial year on 31st March, so last date for LLP to file Annual Return Form-11 is 30th May and Form LLP 8 within 30 days from the end of 6 months of such financial year, so the due date to file form 8 for the financial year is 30th October usually.

TAX AUDIT LLPs whose turnover is more than Rs.40 lakh or whose contribution has exceeded Rs.25 Lakh have to get the books of account audited by practicing Chartered Accountants under the Limited Liability Partnership Act, 2008. The deadline to file the tax return for an LLP which is required to get his books audited is September 30th.

DOCUMENTS REQUIRED

• Purchase/ sale Invoices

• Expense invoices • Copy of deposited TDS Challans

• Copy of TDS Returns(If Any)

• Copy of ESI Returns(If Any)

• Copy of GST Returns(If Any)

• Credit Card Statements, if Expenses are incurred by Partner on behalf of the Firm

• Bank Statement from 1st April to 31st March of the relevant Financial Year for all bank accounts in the name of the Firm

• Any other supporting documents, if required SERVICE PROVIDED & PROCESS

• Documentation

• Form-11

• Balance Sheet received from client for Form -8.

• Income Tax Return

• Tax Audit Report (if Applicable)

• Form-8

• Tax Return Preparation

• Justification

• Return Filing

CHOOSE REQUIRED PLAN:

Basic: Income Tax Return filling and LLPs Corporate Compliances upto turn over less than 10 Lakhs.

Service Fees- 6899/-

Standard: Income Tax Return Filling and LLPs Corporate Compliances upto turn over 40 Lacs.

Service Fees- 13899/-

Ace: Income Tax Return Filling and LLPs Corporate Compliances upto turn over 100 lakhs.

Service Fees- 20899/-

* Prices may differ according to your annual sales/ turnover. You will be intimated about the price applicable to you by our tax experts, during the time of consultancy.

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Frequently Asked Question (FAQ’S)-

What are the features of LLPs?

• An LLP offers the facilities/qualities of being a separate legal entity different from that of its partners, perpetuity, and limited liability to its partners.

What is the minimum no of Partners required to form LLP?

Only two partners are needed at a minimum to form an LLP in India; there being no limit to the maximum permissible number of partners. In the case of a private limited company, this maximum limit is 200 (extended from 50 by the new Indian Companies Act of 2013). A foreign national/entity or NRI can be a partner to an LLP in India.

What is the minimum capital required for the registration of an LLP In India?

No minimum capital is prescribed for registering an LLP in India.

What is the minimum amount of contribution required to register an LLP in India?

There is no minimum amount of contribution by the partners required to register an LLP.

Are there any Annual returns required to be filed by an LLP?

An LLP of India is required to file only two regulatory compliances every year. Namely, the Statement of Accounts & Solvency in Form-8, and the Annual Return in Form-11. Again, there is no mandatory requirement of compulsory audit of accounts by a qualified Chartered Accountant in case of an LLP in India, except the following two cases 1. When the contributions of the LLP exceed INR 25 Lac, or 2. When its annual turnover crosses INR 40 Lac

What are the benefits of the formation of a company as LLP?

The advantages of an LLP over a private limited company, or the exclusive benefits offered by an LLP in India, are the following:

• An LLP has no limit to the maximum number of partners. In the case of a private limited company, the maximum number of shareholders has been kept at 200.

• The cost of incorporation of an LLP is lower than that for incorporation of a private or public limited company.

• Organization of the internal structure and management of the business affairs of an LLP are easier and more flexible.

• An LLP has a lower compliance burden, as compared to a private or public limited company

• an LLP has to file only two mandatory compliances every year, which are the Statement of Accounts & Solvency (in Form-8) and the Annual Return (in Form-11).

• The Dividend Distribution Tax (DDT) is not applicable to LLPs in India.

• there is no mandatory requirement of getting the accounts audited by a qualified Chartered Accountant, until- annual turn over crosses INR 40 Lakhs. or the contributions of the LLP exceed INR 25 Lac.

What are the Tax Policies Of LLP?

For the purpose of taxation, LLPs are treated like Partnership Firms. The Minimum Alternate Tax(MAT) and DDT are not applied to LLPs in India, apart from the LLP’s will be liable to pay AMT on their adjusted total income (equivalent to adjusted taxable income). The taxes applicable to an LLP in India, are the following:

• Income Tax: 30%. In case, when the income of the LLP exceeds INR One Crore in any financial year, then Surcharge @ 10% will be applied.

• Education Cess: 3%.

Is FDI allowed in LLP & who can invest in LLP as FDI?

The recent FDI norms and policies of the Government of India, especially those which were announced in November 2015, allow NRIs and Foreign Nationals/Investors for making FDI up to 100% in Indian LLPs through Automatic Route into some specified economic sectors. Some provisions have also been made effective for easy, fast, and smooth set-up and management of LLPs by NRIs and Foreign Investors, particularly when the annual sales turnover is less than INR 40 Lac, or when the contributed capital is less than INR 25 Lac.

How can a person be a partner of a LLP?

Persons, who subscribed to the “Incorporation Document” at the time of incorporation of LLP, shall be partners of LLP. Subsequent to incorporation, new partners can be admitted in the LLP as per conditions and requirements of LLP Agreement.

What will be the obligation of a partner in case he change his name or address?

Every partner shall inform the LLP of any change in his name or address within a period of fifteen days of such change. The LLP, in turn, would be under obligation to file such details with the Registrar within thirty days of such change.

How can an existing partner cease to be a partner of a LLP?

A person may cease to be a partner in accordance with the agreement or in the absence of agreement, by giving 30 days notice to the other partners. A person shall also cease to be a partner of a limited liability partnership- (a) on his death or dissolution of the limited liability partnership, or (b) if he is declared to be of unsound mind by a competent court; or (c) if he has applied to be adjudged as an insolvent or declared as an insolvent. Notice is required to be given to ROC when a person becomes or ceases to be a partner or for any change in partners.