Each company whether a Private Limited Company, Limited Company or One-Person Company is requir...
Limited Liability Partnership in India, is the one which is registered under the LLP Act, 2008. The Limited Liability Partnership registration means an entity which is a mixture of Partnership and a company. In this article, we are explaining Mandatory Compliance for LLP.
LLP is a separate legal entity which is registered under the Ministry of Corporate Affairs of India. The minimum numbers of partners required is two to start an LLP. The mandatory compliance requirement is that amongst the two partners,’ one must be Indian Citizen. It is the responsibility of partners in LLP to do proper maintenance of the books of accounts, doing compliance for LLP like filing of income tax returns, and filing of annual return with the Ministry of Corporate Affairs.
One partner is not responsible for the conducts of the other partner. Also, the LLP does not carry personal liability.
The LLP gives protection like a company to its partners. As the partners have separate from the company.
The LLP can raise funds from different sources like Banks and NBFC.
The LLP can fill any number of partners, as there is no limit given.
The purpose of the Annual Compliance of LLP is to raise its market credibility. The status of annual filing is displayed at the Master Data of the LLP on the MCA Portal. The data is accessible to any person, and it can be used for loan approvals or other similar requirements. The compliance for LLP is the primary criterion for improving the credit score of the organization.
Every person or company entering into the contract with an LLP would like to measure the financial worthiness of the LLP. The contracts entered by the LLP are accessible by every person. LLP Annual filing provides the annual financial worth of the company and its capacity to the other party.
The annual compliance for an LLP is important, as non-filing attracts the penalties. The LLP who are frequently defaulting in the yearly filing of Returns will receive the status of the defaulter or defunct. The partners will be declared defaulters and will be disqualified from the other appointments.
Regular filing saves the LLP from the hefty fines or penalties and disqualification.
For conversion of LLP into any other type or format of company, annual filing is essential. The regular compliance for LLP keeps a track and records the conversion process with ease (if LLP converts). The same applies, in the case of, closure of an LLP. If the LLP becomes non-operational, the LLP’S are asked to do compliance procedures.
The LLP’s who are registered under the Ministry of Corporate Affairs, according to Limited Liability Partnership Registration procedure defined in the LLP Act, 2008; have to undergo mandatory compliances such as:
|1.||FORM-11||That within 60 days of the Closure of Financial Year, the form must be submitted|
|2.||FORM-8||On or Before 30th October Every Year|
|S.No.||Income Tax Returns||Due Dates|
|1.||In case of Audit is not required for the statement of accounts||31st July, every year|
|2.||In case of Audit is required for the statement of accounts||30th September every year|
|3.||LLP involved in the International Transaction||30th November every year|
A. Filing of LLP Annual Return
B. Filing of Statement of Accounts and Solvency
C. Filing of Income Tax Return
D. Maintenance of Books of Accounts
It can be well concluded that Limited Liability Partnership Registration as a form of organization, brings with it the compliances for an LLP, which needs to be duly fulfilled. The non-fulfillment will attract penalties and fines on the directors or partners. It keeps track of record with the MCA when compliances are duly filled by the LLP. It not only increases their credibility but attracts the investors with them too.
Read our article:An Overview on Annual Filing of LLP