Annual Compliance for LLPs: A Complete Guide from Licit 360's blog

Limited Liability Partnerships (LLPs) have become a popular business structure in India due to their unique blend of benefits—offering the flexibility of a partnership and the limited liability protection of a company. However, like any business entity, LLPs are required to adhere to certain annual compliance requirements to maintain their active status and avoid penalties. This guide provides a comprehensive overview of annual compliance for LLPs in India.

Annual compliance is not just a regulatory obligation; it ensures transparency, protects stakeholders' interests, and maintains the LLP’s good standing with the Ministry of Corporate Affairs (MCA). Non-compliance can lead to heavy penalties, legal complications, and even the potential closure of the LLP.

• What It Is: Form 11 is a summary of the LLP’s management, including details of partners and any changes during the year.

• Due Date: May 30th of each financial year.

• Late Filing Penalty: INR 100 per day until the filing is completed.

• What It Is: Form 8 is a declaration of the LLP’s financial position and solvency status.

• Due Date: October 30th of each financial year.

• Key Information Required:

• Statement of assets and liabilities

• Income and expenditure details

• Late Filing Penalty: INR 100 per day.

• What It Is: All LLPs are required to file their Income Tax Returns (ITR), regardless of whether they earn a profit.

• Due Date:

• July 31st (if tax audit is not required)

• October 31st (if tax audit is required)

• Tax Audit Applicability: If the LLP’s turnover exceeds INR 1 crore.

• What It Is: Partners holding a Designated Identification Number (DIN) must complete their KYC annually.

• Due Date: September 30th of each year.

• Penalty for Non-Compliance: Deactivation of DIN, which can only be reactivated after a penalty payment of INR 5,000.

LLPs registered under GST must file monthly, quarterly, or annual GST returns, depending on their turnover and the chosen filing structure.

An audit is mandatory if the annual turnover exceeds INR 40 lakh or if the LLP’s contribution exceeds INR 25 lakh. Appointing a qualified Chartered Accountant for the audit is crucial in such cases.

Failing to meet annual compliance requirements can lead to significant penalties:

• Form Filing Delays: INR 100 per day per form, with no maximum cap.

• Income Tax Non-Compliance: Penalties under the Income Tax Act, 1961.

• Strike-Off Risk: Repeated non-compliance can lead to the LLP being struck off by the Registrar of Companies (RoC).

1. Maintain Accurate Records: Keep detailed records of financial transactions and partner details.

2. Set Reminders for Due Dates: Use calendar tools or compliance software to track deadlines.

3. Engage Professional Help: Consult with legal and accounting experts to ensure accuracy and completeness.

4. Regular Review: Periodically review compliance requirements to stay updated with regulatory changes.

Giving the best legal services in Indore Navigating the complexities of LLP compliance can be daunting, but Licit360 simplifies the process with expert services tailored to your needs. From filing annual returns to ensuring tax compliance, we’ve got you covered. Visit ourAnnual Compliance LLPto learn more and get started today.

Staying compliant is crucial for the smooth functioning and reputation of your LLP. By adhering to the annual compliance requirements outlined above, you can avoid penalties and focus on growing your business. Partnering with a trusted service provider like Licit360 ensures that you stay on top of your compliance obligations efficiently and hassle-free.