Annual Compliance

LLP Annual Filing Form-8 Due Date: A Conflict Resolved

The Filing of Return by every LLP must be done periodically. This means, like every other company, it will have LLP Annual filing under Form-8 on the respective due dates. This is done for maintaining the compliance and escape of hefty penalty under the law for non-compliance. The compliance procedure to be followed by the Limited Liability Partnership is very low as compared to the other public and private limited companies.

The compliance seems to be very high in case of the Limited Liability Partnership Registration. If non-filing of the taxes or annual return, it is penalized up to 5 Lakhs Rupees.

What is LLP Annual Filing of Return?

It means that every registered LLP has to make its statement of annual returns in the prescribed form that is, Form-11. This form is about the summary of the management of affairs of LLP, as the number of partners in LLP, names of the partners, the amount tax paid by LLP. Form 11 has to be submitted every year 30th May.

Why LLP has to show Statement of Accounts in LLP Annual Return?

This concerns Form-8 which is to be submitted every year, where the LLP is required to maintain their books of accounts in place and fill in data concerning the profits made and other financial data regarding the business. This Form-8 needs to be attested by the CS-Company Secretary, CA-Charted Accountant, and Cost Accountant, who are practising.

Form-8 is the statement of Accounts and Solvency Report. The failure to file the Form-8 on the respective due dates will attract penalties, which is Rupees 100 per day.

Notification by MCA-General Circular No.-31/2020 dated 28.09.2020, which was regarding the settlement of LLP settlement Scheme, 2020, and Due date of Filing of Annual LLP Return

The Form 8 that is, statement of Accounts and Solvency, in Form 8 has to be submitted within 30 days from the expiry of six months, from the closure of the financial year, that is last by the 31st October of the subsequent financial year.

1. What was the Notification about LLP Annual Filing in Form-8, Due dates?

• The notification talks about rectifying the anomaly in extension of LLP Settlement Scheme, 2020, and due dates for the LLP Annual Filing under Form 8 and 11 annually.
• The Circular of March 2020, which modified the provisions related to LLP Settlement Scheme 2020, to allow one time, condonation of delay of filing statutory forms/documents, by the LLP with the registrar.
• Under LLP Settlement scheme, 2020^[1], the defaulting parties were permitted to file its belated statutory documents/ forms, or for the LLP Annual Filings, which were due for filing till 31.08.2020. This date was amended till 30.09.2020 to avail the benefits of the scheme.
• Finally, the date has been extended up to 31st December 2020, this was updated by the notification 28th September.

2. What was the Cause of Conflict in two notifications of 28th September 2020 and 31st March 2020?

There was a conflict concerning:

• There was no update for the corresponding extension to be made in the cut of date for the applicability of the LLP Settlement Scheme, 2020, that is, the due date up to which all the forms/ LLP Annual Filings are to be made. The two circulars mentioned 31.08.2020 as the date for the filing.
• This omission in the LLP Annual Filing of return or documents created problems.
• The defaulting LLP’s could file their belated return or their statutory forms, under Form8 or 11 which were up till 31.08.2020 and extended up till 31.12.2020.
• However, the similar relaxation for Form-8 was not notified, including for the other statutory documents or returns or including the statements of account and Solvency in Form 8, which were due for filing only 31.08.2020.

This anomaly created confusion, where the defaulting LLP were able to file returns, that is Form 8 of the financial year 2028-2019, and for the other years, belatedly up till 31.12.2020.

But the LLP’S were not able to file the Form-8 for the financial year, 2019-2020, as the due date for the filing of return or LLP Annual Filing under Form-8 were only 31.10.2020, which failed after 31.08.2020.

3. What MCA has rectified in LLP Annual Filing?

• They have taken the cognizance of the matter, where MCA has increased the cut-off date. They have extended filing of application under the LLP Settlement Scheme, 2020, from 31.8.2020 to 30.11.2020. As the defaulting LLPs will be able to file belated statutory forms/documents that are, including, Form 8 & 11, which were due for filing on or before 30.11.2020 have been extended by 31st December 2020
• The amendment led to the LLP Annual Filing of Return under Form 8 & 11 for the FY 2019-20 also, has been extended by 31st December 2020
• The MCA General Circular No. 37/2020 which is dated 9.11.2020, is given under it, that if a Statement of Account & Solvency under Form 8, for the Financial Year 2019-20, the same shall not be deemed as non-compliance, if it has been signed beyond the period of six months by the end of the financial year but not later than 30.11.2020,
• Indeed, the original due date of filing Form- 8 for LLP Annual Filing, for the Financial Year 2019-20 has been extended from 31.10.2020 to 30.11.2020. So, the LLPs filing their Form 8(LLP Annual Filing) for the Financial Year 2019-20 by 30.11.2020 will not be considered defaulting LLPs under law.
• However, if the LLPs commit default in filing under Form 8 (a statement of Solvency and accounts- LLP Annual Filing) for the Financial Year 2019-20 by 30.11.2020, it was stated that then such Limited Liability Partnership registration (registered LLP) could avail the benefit of LLP Settlement Scheme, 2020, in order to file their Form 8 for the Financial Year 2019-20 by 31.12.2020.

Conclusion:

It can be concluded that the anomaly in the notification of March and September 2020, which created a conflict in the LLP Annual Filing, under Form8 and their respective due dates. The dates have been extended for the Form11 in which there was the belated filing of returns allowed up to 31st December 2020 for the financial year 2019-2020. But in the case of filing of form under Form-8, the respective belated filing was allowed for the year 2018-19, but for the financial year 2019-2020, the filing was allowed only 31st August, which as per the norm, to be done after 31st October, 2020 (as the filing is to be done for LLP registration after the completion of the financial year, in subsequent 6 months). This conflict was resolved in the issuance of clarification by MCA.

Read our article:LLP Registration: Step By Step Guide