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What is LLP Annual Filing?
Limited Liability Partnerships are separate legal entities formed by a minimum of two partners. LLP annual filing compliance requires the listing of two separate forms- one for the annual return and the other for Statement of Accounts and Solvency. As compared to private limited companies, financial compliances for an LLP are significantly low. Penalties, however, in the case of LLPs, are huge if there is non-compliance. Entities that do not provide the needed information are fined with penalties up to Rs. 5 lakhs.
Limited Liability Partnerships are regulated by the Registrar of Companies, Ministry of Corporate Affairs. They are required to do LLP annual filing and endure compliances with the Government every year.
Form 8 LLP is an Annual Statement of Accounts and Solvency to be filed with the Registrar of Companies annually by October 30 every year. It comprises the information related to the assets and liabilities and income and expenditure of the LLP. Form 8 LLP is filed within thirty days from the end of six months of the current financial year.
Form 11 LLP provides details regarding the annual return and a summary of the management affairs of LLP. It also comprises details of all the partners, their contributions to the LLP annual filing, and the business as a whole. Form 11 LLP is to be filed within sixty days from the end of the financial year, i.e., on or before May 30 every year.
|Form 8 LLP||October 30||Statement of Accounts providing details about profits/losses and other essential financial data|
|Form 11 LLP||May 30||Provides for annual return, a summary of management|
|Affairs and number of partners
|Income Tax Return-5||December 31 (or February 15, if tax audit is mandatory)||Income tax return|
|DIR 3 KYC||30th September||To update KYC details with the MCA|
Limited Liability Partnerships enjoy the status of separate legal entities. Thus, it is the duty of the partners to maintain the books of accounts and do MCA annual filing. Limited Liability Partnerships are not required to do auditing of their books of accounts except when their annual turnover is more than Rs. 40 lakhs annually. This makes the process of annual MCA filing simpler since most LLPs are within the aforementioned limit.
As opposed to companies, Limited Liability Partnerships are necessarily required to maintain their financial year from 1st April to 31st March. Thus, the Statement of Account & Solvency is to be filed on or before October 30th of every financial year and the annual return for LLPs is due on May 30th every year. This is even if the LLP has not completed any business in that specific financial year.
Form 8 and Form 11 are to be filed even if no transaction has taken place during the year so as to maintain the active status of LLP through MCA annual filing.
Accounts maintenance in case of Limited Liability Partnerships
Following are the documents required to be prepared for LLP annual filing:
All Limited Liability Partnerships are required to maintain proper books of accounts at the time of MCA annual filing. This statement contains profits or losses and other financial data with respect to business. Form 8 LLP must be attested along with the digital signatures of the designated partners. The Form has to be certified by a Chartered Accountant or a Company Secretary. The penalty for non-compliance in filing Form 8 within the specified date is Rs 100 per day.
As mentioned earlier, all Limited Liability Partnerships whose turnover is more than Rs 40 lakhs or whose obligations have exceeded the threshold limit of Rs 25 lakhs, are required to get their books audited by practising Chartered Accountants under Limited Liability Partnership Act, 2008.
Please note that the threshold limit of Rs.1 crore for a tax audit is now increased to Rs.5 crore with effect from AY 2021-22 in case
(i) the taxpayer’s cash receipts are limited to 5% of the gross receipts, and
(ii) if the taxpayer’s cash payments are limited to 5% of the aggregate payments
under the Income Tax Act, 1961.
LLPs are required to do Income Tax Return filing in the Form ITR-5. This form can be filed online with the help of partners’ DSC. The due date for ITR filing of LLP is 31st July if the books are not required to be audited, and 30th September, if books need to be audited as per LLP Act, 2008.
Besides this, every LLP must mandatorily file TDS return every quarter (if there are any tax deductions for payments of Salary in 24Q form, and payments for services in Form 26Q).
Following are the documents required for LLP annual filing:
Yes, you should do LLP annual filing even when there is no turnover. This is done so as to maintain the ‘Active’ status of LLP with the Ministry of Corporate Affairs. Non-filing will declare your status as inactive and reduce your business’s credibility. Moreover, it leads to an addition in the penalty unnecessarily.
All Limited Liability Partnerships which have been incorporated after October of a year are given the option to choose their financial year between the immediate March and the next March. This means that an LLP that has been incorporated and registered on October 2021 can close its financial year on March 2022 or March 2023 according to its will. However, as per the Income Tax Act, an LLP can not extend its financial year beyond a period of 15 months. Thus, it is preferred to choose the upcoming March to avoid discrepancies.
Taxzona provides a comprehensive LLP compliance service that includes annual filing and LLP income return tax filing at a very affordable price point. In addition to this, we do the following for you:
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Form 8 LLP and Form 11 LLP.
Form-8 LLP consists of the statement of Account and Solvency. It consists of information related to the statement of assets of the LLP annual filing and liabilities and statement of income and expenditure of the LLP.
Form 8 LLP should be filed within 30 days from the end of 6 months of the end financial year. i.e. by 30th October of each financial year.
Form 11 LLP consists of an annual return. It contains the details of all the partners, their contributions towards the LLP annual filing, etc.
Form 11 LLP should be filed within 60 days of the end of the financial year. i.e. on or before 30th May every year.
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