What is LLP or Limited Liability Partnership?
A Limited Liability Partnership also referred to as LLP is governed by Limited Liability Partnership Act, 2008 and on account of easy incorporation, compliance and limited liability of the partner, all small and medium scale business entrepreneurs more frequently use the same.
Every LLP registered in India is required to comply with the compliance stated by the Ministry of Corporate Affairs (MCA) and Registrar of Companies (ROC) for its smooth functioning. Due to this, every LLP must file the below-given forms to ROC & Income Tax return on an annual basis.
- Annual Return Form 11.
- Statement of Accounts and Solvency Form 8.
- Filing of Income Tax Returns
Details of Mandatory Requirements
- Annual Return of LLP:
- An annual return of LLP is a form that carries the details regarding all the partners and other firms or companies in which they are associated as a partner or director. Every LLP is required to file Form 11, which is an Annual Return to the ROC within 60 days of closing of the financial year. The form is required to be attested by a practicing Chartered Accountant or Company Secretary.
- Filing of Statement of Account & Solvency:
- Every LLP is required to submit its statement of accounts and solvency on or before 30th October every year to ROC. The form has all the details regarding profit and loss account, net worth, balance sheet, resolutions, auditor, etc. The statement of Solvency has to be prepared for the period ending on 31st March of every year and has to be signed by Practicing Chartered Accountant or Company Secretary. Both of these forms are required to be filed even if there is no business done by LLP during that year.
- Income Tax Return Filing:
- As per section 139 of the Income Tax Act, every LLP must file its Income Tax return irrespective of the business done or not. Those LLPs for which the book of accounts are not required to be audited has to file its return by 31st July of every year. LLP whose contribution exceeds Rs. 25 Lakh or has turnover more than Rs. 40 Lakh is required to get their accounts audited by a practicing Chartered Accountant. The due date for such LLP is 30th September of the next year.
- Audit Requirement for LLP:
- It is a mandatory requirement for LLP making a contribution of more than Rs. 25 Lakh or the turnover exceeds Rs. 40 Lakh to get their accounts audited by a practicing Chartered Accountant.
- DIR-3 Web KYC:
- Every partner of the LLP is required to verify their KYC through MCA every year. In case if the same is not done, then there shall be a penalty of INR 5000/- for every director. However, if there is no change in the necessary details of the partner then only OTP verification of the partner is required to be done.