An Overview on Annual Filing of LLP

Ashish M. Shaji

28 Dec, 2020

LLP Annual filling is a simple and easy process for giving the information of your organization to the Registrar. LLP Annual filing is due by 30-05-17 of following financial year end. For the good corporate governance and better transparency in business, the filing of annual return has been made mandatory for all.

The Compliances under LLP Act^[1] is minimal as compared to other body corporates. Every Limited Liability Partnership is required to comply with the provisions related to Annual filing as prescribed under the Act.

Most of the LLP’s are confused regarding the filing of annual returns even if they are not doing business. As prescribed under the Act, every LLP in spite of doing or not doing business has to file an annual return to the registrar. In this article, we will review the required Annual Filing of LLP and consequences of non-compliances.

Annual Filing of LLP: Forms to be filed

An LLP is required to file the following forms with the registrar:

Form-8: Statement of account and solvency

Form 11: Annual return

What are the consequences of not filing these forms?

If these forms are not foiled within the stipulated time period then a penalty of Rs. 100 per day shall be levied. The amount may increase over time as there isn’t any cap on the penalty.

Annual Filing of LLP: Maintenance of Books of Accounts and other Records

Every LLP has to maintain proper books of accounts on mercantile basis. The books of accounts need to be maintained at the registered office of the LLP.  The accounts shall be maintained in the way which is sufficient to explain the transactions.

The Books of accounts shall contain the information of all sums of money received and expended, assets and liabilities, statement of cost of goods purchased and inventories and WIP. The books of accounts shall be maintained for the period of eight years.

In addition to above, all the LLP has to prepare a statement of accounts and solvency every financial year. The solvency statement has to be prepared in the format prescribed by the Authority within the six months of the end of the financial year.

The statement of Accounts and solvency shall be signed by the designated partners of LLP.

Audit Requirement

The accounts of the LLP whose turnover in any fiscal year exceed rupees forty  (40) lakhs and contribution exceeds twenty-five (25) lakhs needs to take into their accounts audited by a Chartered accountant.

Also, partners of LLP on their discretionary, in spite of turnover or contribution, gets its LLP accounts audited. Further, as per income tax, the requirement of an audit of LLP accounts arise when the turnover of such LLP exceeds rupees hundred (100) Lakh.

Filing of income tax return

Every LLP is required to file income tax return for every year. As the LLP is a separate legal entity therefore with partner’s income tax return one is required to file LLP’s income tax return also within the due date. 

Annual Filing of LLP Accounts

Every LLP has to maintain and file the statement of accounts and solvency with the registrar. The same has to be filed in Form 8 within the period of 30 days from the end of the six months of the financial year i.e. on or before the 30^th October of the next financial year.

Conclusion

A Limited Liability Partnership has lesser compliances to be followed every year as compared to compliance requirements of private limited companies. However, non-compliance with the Annual filing of LLP may attract huge fines. Ensure timely annual compliance filing.

Read our article: Conversion of a company into LLP – Tax implications