Annual filings for Limited Liability Partnership (LLP)
A Limited Liability Partnership (LLP), should file its returns periodically for maintaining compliance and so it can avoid the heavy penalty under the law for non-compliance. The LLP has few compliances which a LLP follows on yearly basis. Further the compliances are very low if compared with 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.
LLP Annual Calendar
LLP Registered on or before 30th September 2017
||Form 11 (Annual Return)
||Summary of management affairs of LLP
(number of partners along with their names)
||Income Tax Return
||Applicable for LLPs not required to do Tax Audit
||Income Tax Return
||Applicable for LLPs required to do Tax Audit
||Form 8 (Accounts)
||Details about the Profit made, and other financial data
Points to remember:
If any LLP are registered on or after 01st October 2017, Form 11 & Form 8 are not required for the financial year ended on 31st March 2018. However, a LLP should file its Income Tax returns because the ITR is applicable.
Limited Liability Partnerships are separate legal entities; hence, it is the duty of the elected partners for maintaining a proper book of accounts and filing an annual return with the Ministry of Corporate Affairs (MCA) annually. Limited Liability Partnerships are not required to audit their books of account except where their annual turnover is more than INR 40 lakhs or if the contribution is more than INR 25 lakh. Hence, an LLP is not required to get their books of account audited if it fulfills the above-mentioned condition, making the process of annual filing simpler.
Opposite to the Companies, Limited Liability Partnerships are mandatorily required to maintain the financial year, from 1st April to 31st March. So the Statement of Account & Solvency in Form 8 is to be filled on or before October 30th of every financial year, as mentioned above, 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. In conclusion, it can be said that some of the annual filings are mandatory irrespective of fact that LLP has any business or not.
Statements of Accounts and Solvency
All registered LLPs are required to have their books of accounts in place and fill in data with respect to the profit made, and other financial data in regards to business, and submit it in Form 8, every year. Form 8 must be attested by the signatures of the designated partners and should also be certified by a practicing chartered accountant or a practicing company secretary or a practicing cost accountant. Failing to file, the statement of accounts & solvency report within the specified due date will lead to a fine of INR 100 per day.
The due date to file form 8 for the financial year 2017-18 is October 30, 2018.
Filing Annual Return
Similarly, Annual Returns are to be filed in the prescribed Form-11. This form is considered as the summary of management affairs of LLP, like numbers of partners along with their names. Moreover, the form 11 has to be filed by 30th May every year.
Filing and Audit requirement under Income Tax Act
As discussed earlier, Limited Liability Partnerships whose turnover is more than INR 40 lakh or whose contribution has exceeded INR 25 Lakh have to get the books of account audited by practicing Chartered Accountants. The deadline to file the tax return for an LLP which is required to get his books audited is September 30th.
NOTE: The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2021-22 (FY 2020-21) if the taxpayer’s cash receipts are limited to 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.
For LLPs where tax audit is not required deadline, the due date for tax filing is July 31st.
For LLPs which have entered into any international transactions with associated enterprises or have undertaken specified Domestic Transactions, need to file Form 3CEB. This form should be certified by a practicing Chartered Accountant. Limited Liability Partnerships which are required to file this Form can do their tax filing by 30th November.
LLPs should file their income tax return in Form ITR 5. This form could be filed online via the income tax website with the help of the designated partner’s digital signature.