Limited Liability Partnerships have been preferred by various entrepreneurs who want the benefits of both a company and a partnership firm. Additionally, LLPs have fewer Compliance for Private Limited Company. However, LLPs have to comply with certain compliances as required under the Income Tax Act, 1961, Limited Liability Partnership Act, 2008, etc. These laws govern the annual compliances, a LLP has to fulfill. This Article will deal in detail annual compliances which are mandatory for a LLP.
Under the Income Tax Act
Every individual, Limited Liability Partnership, Company, etc. have to file income tax return, provide their details of income and the tax - they're liable to pay to the government. LLP income tax return can be filed in form ITR-5.
The said form can be filed online and the same has to be digitally signed by a designated partner of the LLP. The due date for filing income tax return of a LLP is 30th September. Every LLP is required to conduct and fulfill the audit requirements as provided under the income tax act.
Under the Limited Liability Partnership Act
Limited Liability Partnership Act is the main act which governs the working of LLP. Under the said act there is various compliance that a LLP has to comply with. It provides for various forms which have to be filed to the Registrar of the LLPs. The act requires following forms to be filed to the registrar of LLPs:
1. Statement of Account and Solvency: Form 8
Form 8 contains a statement of solvency, Statement of income and expenditure and statement of accounts. These statements have to filed online within 30 days from the end of six months of the financial year. A LLP is also required to pay the fee prescribed for the filling of Form 8 to the Registrar. Like for LLP having a contribution up to Rs. 1 lakh, the prescribed fee is Rs. 50 and for LLP having a contribution upto Rs. 10 lakhs the prescribed fee is up to Rs. 200. Thus, the fee differs on the basis of contribution in the LLP and is from Rs. 50 to Rs. 200.
A LLP in case it is Micro, small and Medium enterprise then it has to provide disclosure under the same. Further, in case there are any contingent liabilities a statement relating to the same shall also be provided.The form has to be digitally signed by minimum two designated partners of LLP or authorized Representatives of foreign LLP.
2. Annual Return: Form 11
Form 11 requires LLP Annual Filing to the registrar of LLPs. The said form is mandatory even if there is no profit or business in the LLP. Further, it is to be filed electronically. LLP has to file an annual return within 60 days from the end of a financial year. It requires details like details of LLP and its designated partners and partners and total liabilities and contribution of the LLP, penalties and compounding offences details if any. This form can be submitted only once and the details filled in this form must be similar to that filed in form 8. This form is required to be signed one designated partner of the LLP. A LLP is required to attach the details of LLP/company in which LLP’s partners are partners/directors.
Under Goods and Services Act
Goods and Services Tax provides for the indirect tax which is levied on goods and services provided by a person. Hence in case, a LLP is engaged in the business of providing goods and services, then the LLP is also required to file the forms as provided under the Goods and Services Act. In pursuance of the same, a LLP has to file form GSTR-1, GSTR-2, GSTR-3, and GSTR-4 online. Further, an annual return under GST has also to be filed by the LLP.
Thus, there are various annual compliances a LLP has to fulfill under various laws. However, it has to be kept in mind that in case a LLP fails to file such forms there are penalties which can be levied on such LLP like in case the Form 8 is not filed with the Registrar of LLP in the prescribed time then the LLP will be liable to a penalty of Rs. 100 per day. Same is the case with non-filling of form LLP Form 11.
Thus, in order to prevent any penalty on your LLP, it is mandatory for you to file all the annual forms as required under the Law. Further, in case you have not filed any form under the LLP Act then you will not be able to wind up the LLP hence you will be at that point of time will be required to fill the forms and pay the prescribed fee as well as the penalty under the LLP Act.