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LLP Annual Filing

Since the dawn of time, the most ideal form of business has been a partnership. A new type of business, LIMITED LIABILITY PARTNERSHIP, is created simply by adding a prefix, such as 'Limited Liability.' The underlying aim for forming this type of business is to cope with the disadvantages of partnership while also remembering the severe standards of a corporation.

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What is LLP Annual Filing?

Since the dawn of time, the most ideal form of business has been a partnership. A new type of business, LIMITED LIABILITY PARTNERSHIP, is created simply by adding a prefix, such as 'Limited Liability.' The underlying aim for forming this type of business is to cope with the disadvantages of partnership while also remembering the severe standards of a corporation.
As a result, a limited liability partnership is a type of entity that combines the characteristics of a partnership firm and a corporation. The LLP is a legal entity independent from and regulated by its associates.
LLPs are chosen by professionals, micro and small firms, and closely held businesses since the establishment process is easy and does not involve many regulatory requirements.
By enacting the Limited Liability Partnership Act of 2008, the notion of a limited liability partnership was introduced.
Annual LLP Compliance Benefits

Compliance with the necessary regulatory obligations of the firm can result in the following benefits:
Reputation- The LLP and its partners will improve their public image by complying with the requirements of the Registrar of Companies and the Ministry of Corporate Affairs. An LLP's compliance obligations can be increased through this method. More investors would be prepared to put money into an LLP that follows the law's criteria.
Compliance- The LLP would be free of any compliance requirements if all compliances were filed within a certain time frame. An LLP can achieve its goals by taking this into account.
Less Burdens- By adhering to the authorities' standards, LLPs will be burdened less when it comes to compliance requirements. It might be detrimental to the LLP's development if compliances are not followed up on or filed. As a result, it is critical that the LLP's partners comply with all compliance standards.
Settlement and Convertibility - For an LLP to be converted into another corporation, it must file an annual report. The annual compliance records filed each year make the conversion and closing of the organization much easier. Before the conversion and settlement of the company, the Registrar usually inquiries about the Annual Compliance with Additional LLP Fee.
Documents Required for LLP Annual Compliance Filing

    • PAN Card & Certificate of Intent (COI): LLP Certificate of Incorporation and PAN Card
    • LLP Contract: The LLP Agreement, as well as any additional agreements, if any,
    • Statements of Financial Position: Designated Partners have signed the LLP's financial statement.
    • Signature in digital form: All Designated Partners must have a DSC.
    • Number assigned to the LLP: Verification
    • The LLP's name is Certificate of Title
    • The LLP's registered office address is: The documents required in relation to the location
    • The LLP's Business Classification is as follows: Business/Service/Occupation/Other Records
    • The LLP's main commercial enterprises
    • Aspects of the LLP's Designated Partners and Partners
    • Total accountability for the contributions of the LLP's partners
    • The LLP's total input is supported by all its partners.
    • Designated Partners and Partners are being reviewed.
    • Details of the penalties imposed on the LLP, if any facts of escalating violations exist, and if any features of the LLP and or company in which Partners hold the position of Director/Partner exist.
Annual LLP Compliance Requirements
A. Statement of Account and Solvency Filing:
    • Fill out the form in the LLP's prescribed format. Form 8 is the eighth grade.
    • All LLPs are required to keep a book of accounts using the double entry method. Form 8 comprises a declaration by the LLP's authorized partners as to the LLP's solvency, as well as information of the LLP's account of assets and liabilities and statement of revenue and expenditure.
    • The partners must sign Form 8 and it must be confirmed by a practicing-chartered accountant, company secretary, or cost accountant.
    • This must be filed within 30 days at the end of the six-month period following the conclusion of the financial year, or by the 30th of October of each financial year.
    • LLPs with a turnover of greater than Rs. 40 lakh or greater than Rs. 25 lakhs must have their records audited by a chartered accountant in good standing.
B. Filing of Annual Returns
    • The form must be submitted to the Registrar of Companies.
    • Fill out the LLP Form 11 in the required format.
    • This must be filed within 60 days after the end of the fiscal year, or by May 30th of each year.
C. Income Tax Return Filing
    • LLPs must file their income tax returns using Form ITR 5, which can be downloaded or filed online using the designated partners' digital signatures.
    • According to the Income Tax Act, all LLPs must conclude their fiscal year by March 31st and file their returns with the Internal Revenue Service.
    • Every year, LLPs having an annual revenue of more than Rs. 60 lakhs must have their accounts audited and file their returns by September 30th.
    • LLPs that do not have to have their accounts audited must file their returns by July 31st of each year.
    • Form 3CEB must be filed by LLPs that have engaged in foreign transactions or specified domestic activities. The paperwork must be signed by a trained chartered accountant and filed by November 30th of each year.
D. MCA and ROC Compliance 
    • Partners must participate equally in accordance with the LLP agreement's criteria. The Limited Liability Partnership Act of 2008 contains such provisions. Every Partner is expected to participate equally.
    • LLPs must also keep their books of accounts up to date in accordance with the MCA and ROC's standards.
    • The Limited Liability Partnership Act of 2008 (LLPA) must be followed.

Annual Filing Forms for LLPs: 
Form 11:
A statement of yearly return is Form 11. Every LLP must file an Annual Return in Form 11 with the Registrar within 60 days of the financial year's end, i.e., Annual Returns must be filed by the 30th of May each year.
Statement of Accounts (Form 8): 
A statement of accounts (Form 8) is a financial statement. Every LLP must prepare and close its accounts by the 31st of March each year. At least two Designated Partners must file Form 8 with the Registrar within 30 days of the end of the six-month financial year, which is October 30th each year.
Late filing of these forms has a penalty of Rs. 100/- per day of late filing.

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Checklist for LLP Annual Filing:

The following actions make up LLP annual compliance:
1.Each financial year's annual return must be filed by May 30th.
2.LLP Account & Solvency must be filed before the end of the fiscal year on October 30th.
3.LLP is required to file an income tax return every year, whether of income, profit, or loss.
LLPs must additionally file income tax returns and GST returns in accordance with MCA requirements in addition to the foregoing obligatory compliance.
Privileges of a Limited Liability Partnership (LLP) in comparison to a Private Limited Company

    • Minutes book, Statutory Registers, and adjustable tax rates are exempt from preservation.
    • An LLP's annual general meeting is not a requirement. AGM is a once-a-year assembly of the Company's Shareholders. There should be no AGM because there is no theory of shareholding in an LLP.
    • A Board of Directors conference is frequently coupled with a board meeting. In an LLP, there are no directors; instead, the firm is governed by selected Partners who are held accountable for compliance. In the case of an LLP firm, the Board of Partners meeting is recommended.
Frequently asked questions:

    1. What are the ramifications of failing to file Form 8?
By the 30th of October, Form 8 must be completely filled out. A penalty of Rs.100 per day of delay may be imposed if you fail to file.
    2. What are the ramifications of failing to file Form 11?
If the LLP does to file Form 11 before the 31st of May, a penalty of Rs 100 per day would be imposed. Because there is no cap on the penalty, the sum might rise over time.
    3. Is annual compliance for all LLPs in India required?
Yes, all LLPs in India are required to comply with annual compliance requirements. If a limited liability partnership (LLP) fails to meet the aforementioned conditions, the government may levy penalties. As a result, all limited liability partnerships in India must comply with the law on an annual basis.
    4. Is it necessary for an LLP to have an audit?
It is required for an LLP to hire a licensed chartered accountant when it is created or incorporated. Aside from that, all forms relevant to the audit must be completed and filed in a timely manner.
    5. Explain Statement of Accounts and Solvency?
Every LLP is required to file an annual LLP Form 8, also known as a "Statement of Accounts and Solvency," which provides information on the LLP's financials, such as assets and liabilities.
    6. What is the LLP Audit Requirement?
Only LLPs with an annual turnover greater than 40 lakhs rupees or a capital contribution greater than 25 lakhs rupees are eligible.
    7. What are the advantages of forming an LLP?
The following are some of the benefits of an LLP:
    • There is no minimum contribution required. 
    • There is no restriction on the number of business owners.
    • Registration fees are lower.
    • There is no obligation for a mandatory audit.
    • Aspects of LLP Taxation

    8. Why is an LLP preferable to a corporation?
The LLP is a preferred business structure because it combines the advantages of a private limited company and a partnership firm. Each partner is only liable up to the amount of their contribution, and no partner is liable for the actions of another.
    9. How do you fill out Form 3 with the characteristics of your partners if you have more than 200?
A limited liability partnership can use a screen called 'Enter/ Update partners' credentials for submitting LLP agreement' to enter/ update the details of all partners.

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