Overview of Annual Compliance of LLP - Brief: What do you mean by LLP?

Limited Liability Partnership is a individual/seperate legal entity recorded under the Ministry of Corporate Affairs (MCAs) in India. For registration into an LLP, there should be at most limited two persons as partners where mandatorily one has to be an Indian citizen and a resident. The partners in an LLP should take responsibility for maintaining a proper book of accounts, filing an Income Tax Return, and submitting an annual return with the Ministry of Corporate Affairs (MCA) on every financial year.

To establish a Limited Liability Partnership (LLP), the returns should be filed periodically for maintaining compliance and escape substantial penalties under the law for non-compliance. A Limited Liability Partnership has only few compliance to be succeeded every year which is certainly lower as compared to the compliance needs to be placed on the private limited companies. However, the fines seem to be quite large. While non-compliance might only impose a Private Limited company INR 1 lakh in terms of penalties, it might impose an LLP up to INR 5 lakh.

Limited Liability Partnerships gets a separate legal institution; therefore, it is the duties of the elected partners for simultaneously maintain a proper book of accounts and filing an annual return in consonance with the Ministry of Corporate Affairs (MCA) yearly. Limited Liability Partnerships are not needed to audit their 'books of account except' where their yearly turnover is more than INR 40 lakhs or if the investment or contributions to the company is more than INR 25 lakh. Therefore, an LLP is not required to get their books of account audited if it fulfils the condition as mentioned above, making the process of annual filing simpler.

Limited Liability Partnerships are required to file their Statement of Account & Solvency within 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 fiscal year. Dissimilar to Companies, Limited Liability Partnerships are mandatorily required to maintain the financial year, from April 1st to March 31st. Hence, the Statement of Account & Solvency is to be filed on or before October 30th of every fiscal 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.

Protection of Limited Liability Partnership

Significant Benefits: Powers enjoyed by LLPs are as follows:

• Powers to sue and be sued
• Powers to open a bank account.
• Powers to employ persons.
• Powers to indulge into all types of legal contracts.
• In an LLP, one partner is not accountable or liable for another partner’s misbehaviour or negligence.
• The associates of an LLP have the right to maintain the business directly.
• An LLP gives limited liability security for the owners.
• An LLP gives limited liability security for the owners.
• During the Post establishment, an LLP can have limitless partners.
• If there is only one companion in an LLP, there is time to find a new one externally, and without the dissolution of the LLP also.
• It is a separate legal existence.
• LLPs have assets and accounts that are separate from that of the promoters.
• An LLP can raise funds from Partners, Banks, and NBFCs.

Do you know: Checklist details for Filing of Annual Compliance

• 1

  Annual returns require to be filed with the Registrar of Companies (ROC).

• 2

  Annual returns to be accompanied and filled up as per the prescribed format of LLP Form 11

• 3

  This is needed to be filed within 60 days from the close of the financial year. This could be done on the 30th of May of each year.

• 4

  The LLP annual compliance ought to be met by every registered LLP, even if there is no marketing activity. It has to be also obtained if the LLP has been closed down and whether or not a business bank account exists.

Legal Papers India Complete Registration Procedure: Annual LLP Compliance

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