Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, are required to file the Forms with the Registrar every year. All registered LLPs are required to prepare their accounts and fill in information regarding the profit earned, or any other financial inputs regarding business, and submit it to MCA and Income Tax Department every year. Following is the summary of compliance required for LLPLimited Liability Partnership (LLP) under the Limited Liability Partnership Act, are required to file the Forms with the Registrar every year. All registered LLPs are required to prepare their accounts and fill in information regarding the profit earned, or any other financial inputs regarding business, and submit it to MCA and Income Tax Department every year. Following is the summary of compliance required for LLP

Compliance Required and Forms

Form to be Filed and Conditions

Due Dates for Filing

Penalty for delay

MCA Compliance : Form 11

Annual Return

30 May 2017

Rs 100 x No of days after 30th May till the date of filing the Form

MCA Compliance : Form 8

Statement of Accounts & Solvency

30 October 2017

Rs 100 Per day or Fine of Rs. 25,000 to a tenure of Rs. 5 lacs

Audit Requirement

Turnover of the LLP crosses 40 lakhs or contribution is more than 25 lacs

30 October 2017

Fine of Rs. 25,000 to a tenure of Rs. 5 lacs

Income Tax Filing

ITR 5

31 July 2017

If delayed loss cannot be carried forward.

Income Tax Audit

ITR 4 and Audit Forms  Turnover of the LLP crosses 100 lakhs

30 September 2017

0.5% of Turnover or 1.5 lacs

Certified by a Company Secretary

Turnover of the LLP crosses 5 Crore or contribution is more than 50 lacs

30 May 2017

Rs 100 x No of days after 30th May till the date of filing the Form

 

Filing of Annual Returns

LLP is required to file LLP Form 8 (Statement of Account & Solvency) and LLP Form 11 (Annual Return) annually. The ‘Annual Return’ is required to be filed within 60 days of close of the financial year and ‘Statement of Accounts & Solvency’ shall be filed within 30 days from the end of six months of the financial year to which it relates. The Designated Partners of the LLP are responsible to file LLP ROC Return.

Penalty fees of Rs.100 per day is charged for from the date of delay till the Form is filed with the ROC.If LLP Form 11 Annual Return is not filed on or before the due date of 31st May, then a penalty of Rs.100 per day until the non-compliance continues will be applicable. Similarly penalty is for Form 8. LLP cannot file Form 8 unless and until form 11 is filed within the specified due date. 

Even when there is no business transaction during the year or LLP is in Losses, it is mandatory to file the above forms. It is, therefore very important for the designated partners to file Annual Returns even if no business is transacted.Further, there is no provision for waiver of penalty. In last 6-7 years the MCA has not announced any waiver or amnesty scheme.The Penalty works out to be very expensive hence it is advisable to file the form on time and avoid penalty provisions

Please Note Filing of Return are important even if you would like to close LLP, as without filing return LLP closure is not possible and all the penal charges need to be paid before application of closure.

In case Turnover of the LLP crosses 5 Crore or contribution is more than 50 lacsthen certificate from Company Secretary is required to be obtained.

Requirement of Audit of account as per LLP Act

In case the turnover of LLP exceeds 40 lacs in Financial Year 2016-17 or

Contribution of partner exceeds 25 Lacs,

Then accounts are required to be audited by Chartered Accountant

Filing Requirements with Income Tax Department:

The due date for filing income tax return for FY 2016-17 and AY 2017-18 is 30th September 2017(whether audit of accounts is required) else it is 31 July in case audit is not required. It is applicable for income earned from April 1st, 2016 to March 31st, 2017. The return filing date is November 30thwherethere are foreign transaction or specified domestic transactions

 

Audit Requirement in Income Tax

LLP is required to audit their book of account if turnover crosses 1 Crore in case of Business and Rs50 Lacs in case of profession.

FAQs on Disclosure,Audit and Filing Requirements

1. Whether every LLP would be required to maintain and file accounts?

An LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A “Statement of Accounts and Solvency” in prescribed form shall be filed by every LLP with the Registrar every year.

2. Whether audit of all LLPs would be mandatory?

The accounts of every LLP shall be audited in accordance with Rule 24 of LLP, Rules 2009.

Such rules, inter-alia, provides that any LLP, whose turnover does not exceed, in any financial year, forty lakh rupees, or whose contribution does not exceed twenty five lakh rupees, is not required to get its accounts audited. However, if the partners of such limited liability partnership decide to get the accounts of such LLP audited, the accounts shall be audited only in accordance with such rule.

3. Whether any provisions in respect of ‘mandatory insurance’ are being proposed in the Act?

No mandatory insurance has been proposed in the Act. It would be difficult to assess insurance requirements of different types and sizes of LLPs. This would depend upon the nature of commercial risk attached with work or assignment handled by each. Applying common insurance requirements across a class of LLPs would result in increasing their costs of operation. Therefore, the underlying concern as to the credit worthiness of the LLP in the event of a contractual default is being addressed through statutory provisions for solvency declaration, disclosure of financial information and audit.

4. Whether any Annual Return would be required to be filed by an LLP?

Every LLP would be required to file annual return in Form 11 with ROC within 60 days of closer of financial year. The annual return will be available for public inspection on payment of prescribed fees to Registrar.

5. Whether the Registrar would have any power to call for information from LLPs?

Registrar would have power to obtain such information which he may consider necessary for the purposes of carrying out the provisions of the Act, from any designated partner, partner or employee of the LLP. He would also have power to summon any designated partner, partner or employee of any LLP before him for any such purpose, in case the information has not been furnished to him or in case the Registrar is not satisfied with the information furnished to him.

6. Which documents will be available for public inspection in the office of Registrar?

The following documents/information will be available for inspection by any person:-

Incorporation document,

Names of partners and changes, if any, made therein,

Statement of Account and Solvency

Annual Return

The fees for such inspection of an LLP is Rs 50/- and fees for certified copy or extract of any document u/s 36 shall Rs. 5/- per page.

7. How would compliance management (i.e. ensuring that LLPs file their documents with Registrars timely and otherwise comply with other procedural requirements under the Act) be ensured in the Act?

The provisions of the Act require LLPs to file the documents like Statement of Account and Solvency (SAS) and Annual Return (AR) and notices in respect of changes among partners etc. within the time specifically indicated in relevant provisions. The Act contains provisions for allowing LLPs to file such documents after their due dates on payment of additional fees. It has been provided that in case LLPs file relevant documents after their due dates with additional fees upto 300 days, no action for prosecution will be taken against them. In case there is delay of 300 days or more, the LLPs will be required to pay normal filing fees, additional fee and shall also be liable to be prosecuted.

For any query you can write to chirag@cachauhan.in. Before making any decisions do consult your Professional / tax advisor. Author do not take any responsibility for misrepresentation or interpretation of act or rules. Neither the author nor the firm accepts any liability neither for the loss or damage of any kind arising out of information in this document nor for any action taken in reliance there on.

 

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