What are Annual Filings? (Overview)

Limited liability partnerships (LLPs) are required to meet fewer criteria for compliance on filing annual returns, in comparison to private limited companies. LLPs are required to provide information related to the statement of accounts, and returns, on an annual basis. Penalties, however, are huge for failure to comply. Entities that don’t provide the requisite information are fined heavily, with penalties that can go up to Rs. 5 lakhs.

Benefits of LLP Annual Filing Compliances

• Higher Credibility: Annual compliance provides for higher credibility to the organization for loan approvals or any other similar requirements.
• Record of Financial Worth: Annual compliance filings by LLP’s provide records to other companies regarding their financial worth, which may result in new and interested investors.
• Stays Active and No Penalties: With regular filings, LLPs are not declared as defunct, and stays active. Also, annual compliance filings are mandatory and hence involve penalties (additional fees) to LLPs, when they default on filings.
• Conversion or Closure: Regular annual compliance filings facilitate easier conversion of Limited Liability Partnerships into other types of companies, as well as quicker resolutions in case of dissolution of partnerships.

Checklist Items for LLP Annual Filing Compliances

• Annual returns need to be filed with the Registrar of Companies.
• Annual returns to be filed as per the prescribed format of LLP Form 11.
• This is required to be filed within 60 days from the close of the financial year, or the 30th of May of each year.
• The LLP annual compliance has to be met by each and every registered LLP even if there is no business activity. In fact, it has to be met even if the LLP has been closed down and whether or not a business bank account exists.

Important Requirements of LLP Annual Filing Compliance

Late fees for form LLP 8 and LLP 11 filing

• Penalty for Late Filing: If an LLP fails to submit its annual filing forms within the specified timeframe, it will be liable to pay a penalty of ₹100 per day per form
• Duration of Penalty: The penalty will be applicable starting from the due date of filing the return and will continue until the actual return is filed
• Responsibilities of Designated Partners: The Designated Partners of an LLP hold the responsibility of maintaining proper Books of Accounts and filing an Annual Return with the Ministry of Corporate Affairs (MCA) each financial year
• Timely Filing to Avoid Penalties: To avoid incurring penalties, it is strongly recommended that LLPs file their LLP Form 8 and LLP Form 11 before the due dates specified by the MCA.

LLP Annual Return

• Purpose: To update the Ministry of Corporate Affairs (MCA) with vital information about the LLP’s operations, partners, and financial status for the financial year.
• Mandatory for: All LLPs registered in India, irrespective of business activity or turnover.
• Due Date: Within 60 days of the financial year-end, typically 31 May of each year.

Forms for LLP Annual Filing

LLP Form 8: Statement of Account and Solvency

• Details the LLP’s financial position and solvency.
• Due Date: Within 30 days from the end of six months of the financial year (typically 31 October).

LLP Form 11: Annual Return

• Provides comprehensive information about LLP’s activities, partners, and compliance status.
• Due Date: Within 60 days of the financial year-end (typically 31 May).

Pre-filling Requirements for MCA LLP Form 11

Digital Signatures:

• Designated Partners (DPs) must have valid DSCs.
• DSCs must be registered with MCA’s e-filing portal.

CIN and LLPIN:

• Keep the LLP’s CIN (Corporate Identity Number) and LLPIN (LLP Identification Number) handy.

Partner Details:

• Names, addresses, DINs (Director Identification Numbers), and other details of all current and past partners during the financial year.

Financial Information:

• Total contributions received from and to partners.
• Details of notices received for penalties or compounding offences.

Filing and Audit Requirement Under Income Tax Act

Citizens are required to file an income tax return (ITR) annually, declaring their income, deductions, and tax liabilities. The due date for filing ITRs is typically 31 July of the relevant assessment year, although it may be extended in certain cases. Taxpayers may also be required to undergo a tax audit if their turnover or gross receipts exceed a specified limit.

The Limited Liability Partnership Act of 2008 mandates that Limited Liability Partnerships with revenues over ₹40 lakh or donations over ₹25 lakh have their books of accounts examined by practising Chartered Accountants. An LLP must submit their tax return by 30 September in order to have his accounts inspected.

LLPs are required to file Form 3CEB if they have participated in particular domestic or international transactions with affiliated companies. This paper should be certified by an active professional accountant. The deadline for filing taxes for Limited Liability Partnerships that must send this Form is November 30. LLPs are required to file Form ITR 5, which is an income tax return. This document may be electronically submitted via the income tax website with the selected partner’s digital signature.

Documents Required for LLP Annual Filing Compliance

Form 8 LLP

You must file the Form 8 inside 30 days from the completion of 6 months after a financial year ends. Two designated partners can sign this form digitally. Also, a company secretary/chartered accountant/cost accountant must certify the same. There are 2 parts in a Form 8 –

• Part A – The solvency statement
• Part B – Statement of expenditure & income, statement of accounts.

For not filing the Form 8 on time, a penalty of Rs 100 per day will be imposed.

Form 11 LLP

This form contains details such as the total number of designated partners, details of partners along with details of body corporates as partners, contributions received by the partners and summary of all partners. All LLPs must file the Form 11 within 60 days after the end of the financial year, along with the fee prescribed. Therefore, the LLPs should file their Form 11 by 30th May every year.

An LLP will not be allowed to close or wind up till it files all its annual returns. Therefore, all LLPs must file their annual returns on time, to avoid penalties.

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