Annual Filings for Limited Liability Partnership (LLP) with MyCAbuddy
For a Limited Liability Partnership (LLP), adhering to periodic filings is crucial to maintain compliance and avoid hefty penalties for non-compliance. Unlike private limited companies, LLPs have fewer annual compliance requirements, but the penalties for non-compliance can be substantial. While a private limited company might face a penalty of INR 1 lakh for non-compliance, an LLP could face penalties of up to INR 5 lakh.
Compliances by LLP:
LLPs are separate legal entities, and it’s the responsibility of elected partners to maintain proper accounts and file an annual return with the Ministry of Corporate Affairs (MCA) annually. LLPs are not required to audit their accounts unless their annual turnover exceeds Rs. 40 lakhs or their contribution exceeds Rs. 25 lakhs. Statements of Account & Solvency and Annual Returns must be filed within specific timelines to avoid penalties. Unlike companies, LLPs must follow a financial year from 1st April to 31st March.
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Statements of Accounts and Solvency:
LLPs must file Form 8 annually, detailing profits, financial data, and other business-related information. This form must be certified by a practicing chartered accountant or company secretary. Failure to file Form 8 by the due date (October 30th) can result in a fine of Rs. 100 per day.
Filing Annual Return:
Annual Returns must be filed using Form-11 by May 30th every year. This form summarizes LLP’s management affairs, including partner details. Penalties for late filing of Form-11 can accumulate over time.
Filing and Audit Requirement under Income Tax Act:
LLPs with turnover exceeding Rs. 40 lakhs or contribution above Rs. 25 lakhs must get their accounts audited by practicing Chartered Accountants. Tax filing deadlines vary based on audit requirements, with deadlines falling in September or July. Form 3CEB must be filed by LLPs engaged in international transactions or specified domestic transactions. LLPs should file their income tax return using Form ITR 5, which can be done online.
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Frequently Asked Questions (FAQs):
If I incorporate my LLP close to year-end, do I still need to file the annual return?
Yes, even if your LLP is incorporated close to the year-end, you are required to file the annual return. The annual return provides a summary of your LLP’s management affairs and partner details, and filing is mandatory to maintain compliance.
What are the consequences of not filing Form 8 on time?
Failure to file Form 8 on time can result in penalties. The penalty is Rs. 100 per day for each day of delay. It’s crucial to adhere to the deadline to avoid accumulating fines.
What additional information is required along with Form 8?
Form 8 should be certified by a practicing chartered accountant or company secretary. Apart from the financial data and profits, no additional information is required for Form 8.
What documents need to be attached to Form 8?
While filing Form 8, there is no requirement to attach any documents. However, the form should be certified by a practicing chartered accountant or company secretary.
Who needs to authorize Form 8?
Form 8 must be certified and authenticated by a practicing chartered accountant or company secretary. Their certification ensures the accuracy and authenticity of the financial information provided in the form.
What are the consequences of not filing Form 11 on time?
Late filing of Form 11, the Annual Return, can result in penalties. It is essential to file Form 11 within the stipulated timeline to avoid incurring fines.
What information needs to be provided in Form 11?
Form 11 summarizes the LLP’s management affairs and includes details about partners. The information required includes the number of partners, changes in partners, and other relevant details about the LLP’s functioning.
Who needs to authorize Form 11?
Form 11 needs to be authorized by a designated partner or two partners of the LLP. Their signature authenticates the accuracy and completeness of the information provided in the Annual Return.