LLP ANNUAL FILING
BASIC PLAN
LLP FULL FORM:
o LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
o The LLP has Separate Legal Entity i.e. the LLP and the partners are distinct from each other.
o Minimum of 2 partners are required to form a LLP. However, there is no limit on the maximum number of partners.
o No requirement of Minimum Capital Contribution.
» Preparation of:
- Balance sheet.
- Profit and Loss statement.
» Income Tax Return Filing.
» MCA Annual Return Filing.
Rs 9,499/-
LLP ANNUAL FILING
STANDARD PLAN
» Preparation of:
- Balance sheet.
- Profit and Loss statement.
» Income Tax Return Filing.
» MCA Annual Return Filing.
Rs 14,999/-
LLP ANNUAL FILING
PREMIUM PLAN
» Preparation of:
- Balance sheet.
- Profit and Loss statement.
» Income Tax Return Filing.
» MCA Annual Return Filing.
Rs 22,499/-
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LLP ANNUAL FILING
- LLP FULL FORM:
- Limited Liability Partnership (LLP) in India do not have too many compliances to meet, as contrasted to the requirements placed on companies.
- While LLPs only need to file statements of accounts and annual returns, failure to do so may lead to heavy fines ranging up to 5 lakhs in some cases.
- LLP ANNUAL COMPLIANCES:
- Limited Liability Partnerships are separate legal entities; hence, it is the duty of the elected partners for maintaining a proper book of accounts and filing an annual return with the Ministry of Corporate Affairs (MCA) annually.
- Limited Liability Partnerships are not required to audit their books of account except where their annual turnover is more than Rs.40 lakhs or if the contribution is more than Rs.25 lakh. Hence, an LLP is not required to get their books of account audited if it fulfils the above-mentioned condition, making the process of annual filing simpler.
- Limited Liability Partnerships are required to file their Statement of Account & Solvency within a period of thirty (30) days from the end of six (6) months of the financial year and Annual Return within sixty (60) days from the end of the financial year.
- Dissimilar to Companies, Limited Liability Partnerships are mandatorily required to maintain the financial year, from 1st April to 31st March. Hence, the Statement of Account & Solvency is to be filled on or before October 30th of every financial year and the annual return for LLPs is due on May 30th every year even if the LLP has not completed any business in that specific financial year. Some of the annual filings are mandatory whether the LLP has begun any business or not.
- MANDATORY LLP ANNUAL COMPLIANCE:
- Some of the mandatory LLP Annual Compliance must meet are:
- Maintenance Books of Accounts.
- Maintenance of incorporation documents and other documents at regd. Office.
- Statutory Audit (if turnover exceeds 40 lakhs).
- Filing of Financial Statements in Form 8.
- Filing of Annual Returns in Form 11.
- Filing of Income Tax Returns.
INCOME TAX RATE FOR LLP ANNUAL FILING
- Income Tax Rate for LLP Annual Filing
- The income tax rate applicable for LLPs registered in India is 30% of the total income. Besides the income tax, a surcharge is levied on the income of the tax payable at the rate of 12% when the total income is exceeding Rs.1 crore.
- Health & Education Cess
- Health and Education cess of 4% is applicable on the amount of income tax and the applicable surcharge.
- Minimum Alternate Tax (MAT) for LLP
- Similar to income tax applicable for a company, LLP is also subject to minimum alternate tax. A minimum alternate tax of 18.5% of adjusted total income is applicable for LLP. Hence, income tax payable by LLP cannot be less than 18.5 percent (increased by income tax surcharge, education cess, and secondary and higher education cess).
- LLP’s involved in International Transaction
- LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant. LLPs required to file Form 3CEB have 30th November as the deadline for LLP tax filing.
PROCEDURE FOR LLP ANNUAL FILING
- LLPs must file an income tax return using Form ITR 5.
- Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner.
- After filing an LLP tax return, the taxpayer should print two copies of Form ITR-V.
- One copy of ITR-V, signed by the assessee should be sent by ordinary post to Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka).
- The other copy can be retained by the assessee for his record.
- LLP tax payment can be made in physical mode through designated banks or E-payment mode.
- LLPs that are required to get their accounts audited are required to pay tax through e-payment mode only.
- To pay tax at designated banks, Challan ITNS 280 must be provided with the tax payment.
LLP ANNUAL MAINTENANCE
All the Limited Liability Partnership are required to maintain proper account banks on a cash basis or accrual basis. As Private Limited Companies are required to maintain books of accounts only on an accrual basis.
The LLPs have the option of maintaining the books of accounts on a cash basis as well. The books of accounts must be maintained at the registered office of the LLP and must contain all the information like:
- Money received and spent
- Assets and liabilities
- Statement of COGS
- Inventories and finished goods statement.
At the end of each financial year, the LLPs are required to prepare their financial statements within 6 months for filing with the ROC.
- All registered LLPs are required to maintain their books of accounts and fill the data regarding the profits incurred as well as other financial data relevant to business and submit it along with Form 8 every year.
- Form 8 must be attested by the designated partners by duly signing it. It is also necessary to get it certified by a practicing chartered accountant or a practicing company secretary or a practicing cost accountant.
- Failing to file the statement of accounts and the solvency report within the specified duration will lead to a penalty of Rs. 100 per day.
LLP ANNUAL FILING
- The LLPs are required to elect the partners for maintaining proper books of accounts and filing the annual return with the Ministry of Corporate Affairs annually.
- The book of accounts of the LLPs need not be audited except in case the annual turnover is more than Rs.40 lakh or if the contribution is more than Rs. 25 lakh.
- Hence, the process of annual filing is simpler for the LLPs.
- Some of the annual filings are mandatory even if the LLP has begun the business or not.
- LLP Annual Form 8 is an annual filing is to be filed with ROC every year.
- Statement of account and solvency shall be filed with the registrar within 30 days from the end of 6 months of the financial year to which the statement relates.
- This form includes a declaration on the solvency state of the LLP by the designated partners and also information related to the statement of assets and the liabilities and statement of income and the expenditure of the LLPs.
LLP TAX AUDIT
- LLPs are required to get the accounts audited by a practicing chartered accountant if the annual turnover in any financial year exceeds Rs. 40 lakhs or if the contribution exceeds Rs. 25 lakh.
- To avail exemption from audits, the LLP accounts must contain a statement by the partners to the effect that the partners acknowledge their responsibilities for complying with the requirements concerning accounting and preparation of financial statements.
WHAT WE PROVIDE TO YOU WITH LLP ANNUAL FILING
- Your LLP will be assigned a dedicated Compliance Manager who will be a single point of contact to help you maintain the compliance for your LLP.
- You can get in touch with your Compliance Manager at anytime and get assistance on matters related to your LLP compliance.
- All LLP are required to maintain accounts and prepare financial statements at the end of each financial year.
- Our Compliance Manager will help your LLP maintain accounts and will prepare the financial statement for your business at the end of financial year.
- We will prepare and file Form 11 for your LLP based on information provided by you.
- To file Form 11, we will require the contribution paid by each partner in the previous year.
- We will prepare and file Form 8 for your LLP based on information provided by you.
- To file Form 8, we will be responsible for preparation of the accounting and financial statements preparation for the company.
- Income tax return for a LLP must be filed irrespective of income, profit or loss. Hence, even a LLP with no transactions are required to file income tax return each year.
- LLP income tax return will be due on 31st July if there is no tax audit requirement.
- If tax audit is required, the LLP income tax return will be due on 30th September.
COMPARISON OF DIFFERENT BUSINESS ENTITIES
| Type | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person. | A formal agreement between two or more parties to manage and operate a business. | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders. |
| Ownership | Sole Ownership | Min 2 Partners, Max 50 Partners | 2- Unlimited | Min 2 Directors, Min 2 Shareholders, Max 15 Directors, Max 200 Shareholders. |
| Legal Status of Entity | Not Considered as separate Legal entity | Not Considered as separate Legal entity | Considered as separate Legal entity | Limited to the extent of share capital |
| Registration | Not Compulsory | Optional/ Can be Registered under partnership Act 1932 | Registered Under MCA | Registered Under MCA |
| Transferability Option | Not Allowed | Not Allowed | Can Be Transferred | Can Be Transferred |
| Taxation | As in Individual | 30% of Company Profit | 30% of Profit Plus CESS and Surcharges applicable | 30% of Profit Plus CESS and Surcharges applicable |
| Annual Filings | Income Tax Returns with the Registrar of companies | Income Tax Returns with the Registrar of companies | Filed with the registrar of the company | Filed with the registrar of the company |
FREQUENTLY ASKED QUESTION - FAQ.
What is the LLP Annual Compliance?
An LLP is supposed to file the LLP annual return in Form 11, the financial statement of the accounts and solvency, and the income tax return.
Is FORM 8 mandatory for the LLP's?
The LLP Form 8 or the statement of account and the solvency is to be filed every year by all the LLPs that are registered in India. It is filed with the MCA irrespective of the turnover.
What are the Compliances for the Partners in LLP?
The Partners need to comply with the annual return filing with the MCA, filing the statement of accounts.
What is the Compliance exemption for the LLP's?
There are many privileges for the LLPs as compared to other companies there are exemptions from maintaining the minutes’ books, statutory register, annual general meeting as well as flexible rates.
Is a Board meeting held for the LLP's?
The Board meeting is conducted by the Board of Directors, here no Board of Directors is involved in the LLPs instead the designated partners run the whole business and are also responsible for the compliance.
Why is it necessary for the LLP's to comply with the ROC Compliance?
The LLPs are corporate entities and are operated by the legal rules and the procedures that are the stated in LLP Act 2008. Irrespective of the turnover the LLPs have to file the annual returns giving details on the management on the financial performance. Any delay in the same attracts a heavy penalty.
What are the consequences of the non-filing of FORM 8?
Form 8 must be duly filled by the 30th of October. Failure to file can incur a penalty of Rs.100 per day of delay.
What additional information needs to be provided along with FORM 8?
- Form 8 is a Statement of Account and Solvency. It must depict the financial transactions undertaken during the financial year and also the financial position during the year. In addition to this, the LLP must also declare:
- The turnover, whether it is above or below Rs 40 lakh.
- It must also declare that it has previously filed a statement indicating the creation of charges/modification/satisfaction until the current financial year.
- Also, declare that the partners/authorized representatives have taken due care and responsibility for the preparation of accounts and proper maintenance of the same.
What are the attachments to FORM 8?
The following documents must be attached with Form 8:
- Disclosure under Micro, Small and Medium Enterprises (MSME) Development Act, 2006 is a mandatory attachment.
- Statement of contingent liabilities to be attached in case any contingent liability exists.
- Any other relevant information can be provided as an optional attachment.
Who needs to authorize FORM 8?
- Form 8 is a form and hence must be digitally signed by a minimum of two Designated Partners of LLP or Authorised Representatives of Foreign LLP if the total turnover of the LLP is less than or equal to Rs 40 lakh or partner’s obligation of contribution is less than or equal to Rs 25 lakh.
- In case the total turnover of the LLP exceeds Rs 40 lakh or partner’s obligation of contribution exceeds Rs. 25 lakhs, then Form 8 must be certified by the auditor of the LLP/ FLLP.
What are the consequences of the non-filing FORM 11?
If Form 11 is not filed by the LLP by the 31st of May, then Rs 100 will be levied as a penalty per day for delay. The amount can also increase over time as there is no cap on the penalty.
What is the information that needs to be provided in FORM 11?
- Form 11 is a statement for partner information and all the contributions made. Additionally, the LLP also needs to provide information about other companies or LLPs in which the partners hold a similar position.
- The contribution stated in Form 11 must match the declaration made in Form 8, and therefore it must be filled cautiously.
Who needs to authorize FORM 11?
- If the turnover does not exceed Rs 5 crores and the total partner contribution does not exceed Rs 50 lakh then digital signatures of the designated partner will suffice. However, if the turnover exceeds Rs.5 crores and the total partner contribution exceeds Rs 50 lakh, then Form 11 needs to be certified by a Company Secretary in full-time practice.
- The contribution stated in Form 11 must match the declaration made in Form 8, and therefore it must be filled cautiously.
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