Annual filing for Limited Liability Partnership
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Annual filing for Limited Liability Partnership
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LLP Annual Compliance and Filing Requirements in India
For a Limited Liability Partnership (LLP), timely filing of returns is crucial to ensure legal compliance and avoid hefty penalties. While LLPs have relatively fewer compliance requirements compared to private limited companies, the penalties for non-compliance can be significantly higher. For instance, a private limited company may incur penalties of around ₹1 lakh, but an LLP could be fined up to ₹5 lakh for similar defaults.
Compliance Requirements for LLPs
LLPs are recognized as separate legal entities, and it is the responsibility of the designated partners to maintain proper books of accounts and file annual returns with the Ministry of Corporate Affairs (MCA).
1. Audit Requirement
An audit is mandatory only if:
The annual turnover exceeds ₹40 lakhs, or
The capital contribution exceeds ₹25 lakhs.
If these thresholds are not crossed, an LLP is not required to audit its books, making annual compliance relatively simple.
Key Annual Filings for LLPs
2. Statement of Account & Solvency (Form 8)
This form includes financial data and declarations of solvency.
It must be signed by the designated partners and certified by a practicing CA, CS, or CMA.
Due Date: On or before October 30 every year.
Penalty for Delay: ₹100 per day until filed.
3. Annual Return (Form 11)
This form provides a summary of the LLP’s management, including names and details of partners.
Due Date: On or before May 30 every year.
Required even if the LLP has not conducted any business in the financial year.
Filing Under Income Tax Act
4. Audit Requirement under Income Tax
LLPs with turnover above ₹40 lakhs or contribution exceeding ₹25 lakhs must get their books audited by a practising CA.
Due Date for Tax Return (if audit required): September 30
Due Date (no audit): July 31
5. Special Cases (Form 3CEB)
If the LLP has international or specified domestic transactions, Form 3CEB must be filed and certified by a CA.
Due Date: November 30
6. Filing Income Tax Return
LLPs must file income tax returns using Form ITR-5.
Filing must be done online through the Income Tax portal using the digital signature of a designated partner.
Note:
As per the Income Tax Act, 1961, the audit threshold limit has been increased from ₹1 crore to ₹5 crore if cash transactions (both receipts and payments) do not exceed 5% of total transactions. This is effective from AY 2021–22 onwards.
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FAQs
1. If I have incorporated my LLP close to year-end, do I still need to file the annual return?
If an LLP is incorporated after 1st October (e.g., 1st October 2020), it may file its first financial return either for the coming March (31st March 2021) or the next (31st March 2022). The LLP can opt to file the first financial return for an extended period of up to 18 months.
2. What are the consequences of the non-filing of Form 8?
Failure to file Form 8 by the due date (30th October) results in a penalty of ₹100 per day of delay. There is no cap on this penalty.
3. What additional information needs to be provided along with Form 8?
Form 8, being the Statement of Account and Solvency, must include:
Turnover (above or below ₹40 lakh).
Confirmation on filing of statements of creation/modification/satisfaction of charges (if applicable).
Declaration that proper care has been taken in maintaining accounts and preparing statements.
4. What are the attachments to Form 8?
Disclosure under the MSME Development Act, 2006 (mandatory).
Statement of contingent liabilities, if any.
Optional attachments as applicable to the LLP’s financials.
5. Who needs to authorise Form 8?
LLPs with turnover ≤ ₹40 lakh or contribution ≤ ₹25 lakh: Minimum two designated partners must digitally sign.
LLPs exceeding these thresholds: Form 8 must also be certified by a Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant.
6. What are the consequences of non-filing of Form 11?
If Form 11 is not submitted by 31st May, a fine of ₹100 per day applies with no upper limit, leading to potentially high penalties.
7. What is the information required in Form 11?
Details of partners and their contributions.
Information on other companies/LLPs where partners hold similar positions.
Contribution details must match those provided in Form 8.
8. Who needs to authorise Form 11?
Turnover ≤ ₹5 crore and partner contribution ≤ ₹50 lakh: Digital signatures of designated partners are sufficient.
If either threshold is exceeded: Certification by a practicing Company Secretary is mandatory.
9. Do LLPs need to file income tax returns even if there is no business activity?
Yes, all LLPs must file Income Tax Returns annually, even if there was no income or business activity during the financial year.
10. What is the form used for LLP Income Tax Return?
LLPs must file Form ITR-5 for income tax return filing. It is filed online using the digital signature of a designated partner.
11. Is it mandatory for LLPs to register for GST?
No, GST registration is only mandatory if the LLP’s annual turnover exceeds ₹20 lakh (₹10 lakh in special category states) or if it is involved in inter-state supply of goods or services.