LLP ANNUAL FILING

LLP ANNUAL FILING

Limited Liability Partnership is a individual/seperate legal entity recorded under the Ministry of Corporate Affairs (MCAs) in India. For registration into an LLP, there should be at most limited two persons as partners where mandatorily one has to be an Indian citizen and a resident. The partners in an LLP should take responsibility for maintaining a proper book of accounts, filing an Income Tax Return, and submitting an annual return with the Ministry of Corporate Affairs (MCA) on every financial year.

Limited Liability Partnerships have to get the books of account audited by practicing Chartered Accountants, especially whose turnover is more than INR 40 lakh or whose contribution has exceeded INR 25 lakh. The deadline to file the LLP Annual return filing is 30th September. But for the LLPs whose tax audit has not required any deadline. So, the due date for tax filing is 31st July.

The LLP Annual return is to be filed in the prescribed Form-11. It is the summary of management affairs of LLP, such as numbers of partners along with their names. Apart from this, the Form-11 has to be filed by 30th May each year. Every LLP who is already registered with the Ministry of Corporate Affairs have to file the Annual Returns and Statement of accounts for the Financial Year .

For a Limited Liability Partnership (LLP), the returns should be filed periodically for maintaining compliance and escape heavy penalty under the law for non-compliance. A Limited Liability Partnership has only few compliances to be followed every year which is amazingly low as compared to the compliance requirements placed on the private limited companies. However, the fines seem to be quite large. Whilst non-compliance might only charge a Private Limited company INR 1 lakh in terms of penalties, it might charge an LLP up to INR 5 lakh.

Limited Liability Partnerships are required to file their Statement of Account & Solvency within thirty (30) days from the end of six (6) months of the financial year and Annual Return within sixty (60) days from the end of the fiscal year. Dissimilar to Companies, Limited Liability Partnerships are mandatorily required to maintain the financial year, from April 1st to March 31st. Hence, the Statement of Account & Solvency is to be filed on or before October 30th of every fiscal year, and the annual return for LLPs is due on May 30th every year, even if the LLP has not completed any business in that specific financial year. Some of the annual filings are mandatory whether the LLP has begun any business or not.

The necessary compliances of LLP

There are 3 compliances that are necessarily needed for every LLP to comply for any financial year.

• Annual Return
• Financial Statements of the LLP
• Income Tax Returns Filings.

Prescribed Form is to be filed for LLP Annual return

Form 11 is an Annual return that is to be filled by all LLPs irrespective of turnover during the year. Even when an LLP does not carry out any operations or business during the financial year, Form 11 needs to be filed. Apart from Basic information about Name, Address of LLP, details of Partners/ Designated Partners, other details that need to be declared are :

• Total contribution by/to partners of the LLP
• Details of notices received towards Penalties imposed / compounding offenses committed during the financial year

It must be e-filed on the MCA portal. The e-form has to be downloaded and filled in an offline mode. The pre-fill option is available to minimize your efforts and the Pre-scrutiny button is present to validate the data filled in. This is done before you submit the form online.

Pre-requisites to File LLP Annual return (Form 11)

There are various things to keep into account before filing Form 11. These include:

• Limited Liability Partnership Identification Number (LLPIN) to pre-fill the basic data.
• Declaration about the contributions received by the partners of LLP.
• DSC for the designated LLP partner has to be ready.

Documents Needed for Annual Filing of Compliance for LLP

• PAN Card & COI: PAN Card and Certificate of Incorporation of LLP
• LLP Agreement: The LLP Agreement along with any supplementary agreement, if any
• Financial Statements: Financial Statement of LLP duly signed by the Designated Partners
• Digital Signature: DSC of all Designated Partners is required
• LLP Identification Number: Verification
• Name of the LLP: Proof of Title
• Registered office address of the LLP: The documentation needed regards to Location
• Business Classification of the LLP: Record of Business/ Service/Occupation/Others
• Principal business enterprises of the LLP
• Aspects of Designated Partners and Partners of the LLP
• Total responsibility for the contribution of partners of the LLP
• Total input supported by all partners of the LLP
• Review of Designated Partners and Partners
• Details of penalties imposed on the LLP, if any
• Facts of intensifying offenses, if any
• Features of LLP and or company in which Partners hold the position of Director/Partner.

Procedure to File LLP Annual return (Form-11)

1. Download Form: First, Download the form with instruction kit from MCA Portal
2. Find out your LLPIN: Write your LLP name and all LLP registered to MCA containing words you have provided, will be displayed. Choose your LLP and get the LLPIN corresponding to it.
3. Pre-fill the Details of LLP form-11:
   • Fill Year for which this form relates and Start date of financial year for which annual return is being filed for the Year
   • Mention the amount of Contribution
   • Mention the amount of Contribution received by All partners
   • Enter Details of individual(s) as partners: In that point, Designation will automatically capture along with DPIN/PAN. So now just click on the Pre-Fill button all the details of the partner will automatically capture.
   • Details of bodies corporate as partners: Enter the details of bodies corporate as partners required to be mentioned. If any partner belongs to that then just mentioned CIN or FCRN or LLPIN or FLLPIN or any other identification number DPIN, and click on the pre-fill button all the details of partner will be auto captured.
   • Particulars of penalties imposed on the LLP as well as Partners: If any penalty is imposed on LLP and in point no. 13 (ii) if any penalty is imposed on partners then it should be required to be mentioned.
   • Particulars of compounding offences: If you go for Compounding of offenses then you have to provide the details of the same.
   • Whether turnover of the LLP exceeds 5 crores: You have to make tick mark in the round box that if turnover of the LLP exceeds 5 crores then click on Yes button otherwise click on No button.
4. Verify, Sign & Submit: Here your Complete Process for Form Completion is done now go for online for filing of the same form through MCA Portal.

Important Aspects to note while filing Annual return for LLP

Some of the important pointers that all LLPs have to make note of while filing the 5-page Form 11 are as follows:

• Using the pre-scrutiny button available on the Form can help validate the data entered. This will help in processing the data error-free (Without mistakes).
• Wherever figures are declared in the forms, these must be entered as they stand on 31st March.
• Details of LLP and/ or company in which partners/ designated partners( DP) is/are directors/ partner. (It is mandatory to attach this detail in case any partner/ DP is a partner in any LLP and/ or director in any other company).

Protection of Limited Liability Partnership

Significant Benefits: Powers enjoyed by LLPs are as follows:

• Powers to sue and be sued.
• Powers to open a bank account.
• Powers to employ persons.
• Powers to indulge into all types of legal contracts.
• In an LLP, one partner is not accountable or liable for another partner’s misbehaviour or negligence.
• The associates of an LLP have the right to maintain the business directly.
• An LLP gives limited liability security for the owners.
• If the number of Partners decreases less than 2, the sole companion can still find a new Partner to fill the space.
• During the Post establishment, an LLP can have limitless partners.
• If there is only one companion in an LLP, there is time to find a new one externally, and without the dissolution of the LLP also.
• It is a separate legal existence.
• LLPs have assets and accounts that are separate from that of the promoters.
• An LLP can raise funds from Partners, Banks, and NBFCs.

Benefits of Filing Annual Compliances For LLPs

• Higher Credibility: Annual compliance provides for higher credibility to the organization for loan approvals or any other similar requirements.
• Record of Financial Worth: Annual compliance filings by LLP’s provide records to other companies regarding their financial worth, which may result in new and interested investors.
• Stays Active and No Penalties: With regular filings, LLPs are not declared as defunct, and stays active. Also, annual compliance filings are mandatory and hence involve penalties (additional fees) to LLPs, when they default on filings.
• Conversion or Closure: Regular annual compliance filings facilitate easier conversion of Limited Liability Partnerships into other types of companies, as well as quicker resolutions in case of dissolution of partnerships.

Timeline

LLP Annual Filing: We require filing a necessary annual return for LLP with MCA and maintaining yearly compliance.

Annual Return Preparation: Need to make Annual return based on the financials and production during the previous financial year.

Annual Return Verification: Needed to prepare Annual Return based on specifications submitted and send for confirmation and approval.

Finalization: After endorsement, file Annual Return with the Ministry of Corporate Affairs adjacent to the necessary appendages.

Penalty For Non Filing of LLP Annual Filing forms

If you are unable to complete the annual filing for LLP then you will have to pay penalty as per the rules which is Rs 100 per day till it is done. You will not be able to wind up until and unless you file for annual filing. The LLP Act contains provisions for the offense of not filing the returns. To avoid the heavy penalty, utilize your time by consulting the best experts.

If you are thinking of the Filings done by yourself then we recommend that you must employ a legitimate professional. As it is not easy to file and save your tax, it needs proper arrangement and only an expert can do it. In case, if you are not doing any business then also you must file for NIL Returns else it will be risky and you will get into penalties, you can’t close your LLP effectively. So it’s better to consult a specialist, reach us anytime for more details.

Frequently Asked Questions

Q. What are the necessary compliances of LLP?
Ans. There are 3 compliances that are necessarily needed for every LLP to comply for any financial year.
- Annual Return
- Financial Statements of the LLP
- Income Tax Returns Filings.

Q. Do I still need to file returns even if I do not take up any business in a particular year?
Ans. Yes, every LLP has to mandatorily file Annual Returns and financial statements with the Ministry even if they are not doing any business.

Q. What is the Audit Requirement for LLP?
Ans. Only those LLP whose annual turnover exceeds Rs. Forty lakhs or whose capital contribution exceeds Rs. 25 lakhs

Q. When it gets end of the first Financial Year of the LLP?
Ans. Due dates of LLP compliance are based on the closure of each financial year. Financial Year of every LLP must be closed on 31st March.
a) LLPs registered between 1st April and 30th September: The LLP must close its financial year on 31st March of next calendar year.
b) LLPs registered between 1st October and 31st March: The LLP has an option to choose the end of its financial year.

Q. What should I do if it is seen as status of SRN is 'Sent for Resubmission?
Ans. You are required to re-submit your E-Form to rectify the incompleteness pointed out by the concerned MCA office.

Q. What is the method of review of documents that are filled with ROC?
Ans. The First has to login to the Mca portal. Proper fees have to be paid and then following documents of LLP will be available for inspection:-
- LLP registration documents,
- Names of partners and changes, assuming any, made in that,
- Statement of Account and Solvency
- Financial Statement and annual return
The expenses for such a review of an LLP are Prescribed by law.

Q. What is "Statement of Accounts and Solvency"?
Ans. Every LLP has to file LLP Form 8 annually, known as "Statement of Accounts and Solvency" which contains the information relates with financials of LLP like asset-liability etc.

Q. What if LLP is incorporated on 1st December, then at what time financials will be filed?
Ans. If LLP has been incorporated on or after the first October of the financial year, then the first fiscal year of LLP can be of 18 months.

Q. How to file the features of partners in Form 3, in case where it have more than 200 partners?
Ans. A limited liability partnership to enter/ update the details of all partners can do so via a screen for 'Enter/ Update partners' credentials for filing LLP agreement'.