When we invest our money, we think it gives more benefits and less risk. In the same way, when we plan to start our business, we always choose that medium that offers more benefits in less investment and Compliance. An LLP is one of the mediums it gives the benefits of two entities at one time, i.e., company as well as partnership. As a company, it gives the corporate entity to the business, and as a partnership, it imposes less Compliance.
A minimum of two individuals are required to form a limited liability partnership in which at least one must be a resident of India. They are known as designated partners. They hold a DPIN (Designated partner identification number), and there is no limit on the maximum number of partners. Under LLP, one partner is not responsible for the other partner's misconduct, and their liability is limited to the amount contributed in LLP and written as per the LLP agreement. Every limited liability partnership shall use the word LLP at the end of its name.
You must conform to the annual Compliance filing if you're an LLP. You must fill the necessary annual compliances of your Limited Liability partnership as per the schedule the MCA has decided upon in its regulations.
The documents needed for the annual Compliance are as follows:
1. The Pan card of the designated partners of the LLP.
2. The identity proof of the designated partners of the LLP
3. LLP agreement
4. Required financial statements.
5. Minutes of meetings.
Since we have discussed some important LLP Returns Filing requirements, let us move toward the returns filing procedure. The following is a list of LLP Annual Compliances to be filed per the MCA regulations.
The first thought that comes to mind when we hear the word Compliance is a burden, but it is not in the case of LLP. The main feature why LLP attracts individuals is its lower Compliance than any company. The LLP Compliance filing is divided into two parts:
These are compliances which impose on the entity by law and regulations form which it binds, such as the following:
Every incorporated LLP must maintain the minutes of the meetings with the Board of Directors.
Every incorporated LLP must maintain the Book of Accounts with the Board of Directors.
It is mandatory if turnover exceeds 40 Lakhs or the contribution of LLP is 25,00,000.
When it comes to Annual Compliance filing, three Compliance are applicable. The other name of this is Mandatory Compliance. It is to be met no matter whether a business is conducted or any activity is done or noted in the financial year, and in case of any default, 100 rupees per day penalty will impose. The three Annual Compliance for LLP are as follows:
For annual LLP return filing, a summary of partners, including change in management, is to be filled to ROC within 60 days from the closure of the financial year.
The LLP must file its statements of Accounts and Solvency within 30 days after the expiry of 6 months from the closure of the financial year.
It will depend on the audit status of the LLP. If the audit is required, then the date of filing of income tax return is 30th September. Otherwise, it will be till the 31st of the other month.
After drafting and compiling the requisite compliance documents, the LLP must submit them to the Authority. Every registered LLP must observe such compliance filing annually and on time. Non-compliance with the return filing can invite disciplinary action from the Authority against the LLP.
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Q1. What is the annual Compliance for the LLP?
A. A bunch of three Annual Compliance applies to the LLP, which must be met. The other name of Annual Compliance is mandatory Compliance. It must be completed whether the business is conducted, or any activity is done, or note in the financial year in case of any default 100 rupees per day penalty will be imposed.
Q2. What makes one eligible for filing LLP Annual Compliances?
A. You must conform to the LLP Annual Compliance filing standards as directed. Also, you must fill the necessary annual compliances of your Limited Liability partnership as per the schedule the MCA has decided upon in its regulations.
Q4. What is the process of filing Annual Compliances for LLP?
A. You can refer to the process section of this web page to know the detailed procedure for filing LLP Annual Compliances.