A Limited Liability Partnership is a partnership in which some or all partners have limited liabilities. To be functional in India, one of the partners is required to be an Indian citizen and resident. We will go through the regulations applicable to a LLP.
It is mandatory for an LLP to be registered under the Ministry of Corporate Affairs. There are certain rules and regulations which a newly registered LLP must comply to.
There are three major compliances that a Limited Liability Partnership has to necessarily follow after getting registered:
Filing of Annual Returns – In regard to a Limited Liability Partnership, one of the regulations applicable is that a business entity is required to file two ROC Returns annually. The two forms that are supposed to be filled are Form 8 and Form 11. For the first year of incorporation, LLP can file its annual ROC returns for consolidated 18 months. For e.g., if a LLP has been incorporated in the month of October’2020, it can file its ROC Returns for consolidated 18 months till 31st March 2022 at once.
Form 8 is a statement of Account and Solvency. This is also one of the regulations applicable and this form has the statement of company assets, liabilities, income and expenditure. Form 8 can be divided into two parts- A and B. Part A of form 8 consists of the statement of solvency whereas Part B consists of statements of account and income as well as expenditure. The form has to be filed before 30th October of every financial year. Two of the partners are required to sign this form digitally. Certification of this form has to be done by either a practicing CA or CS. A penalty of ₹100 is charged per day for failing to file this form within the deadline.
It has to be noted that if the turnover of the LLP exceeds 40 lacs in a financial year, the financials has to be audited by a practicing CA and has to be attached along with the form 8
Form 11 has the annual returns of the LLP. This form happens to include all the details of all partners as well as all kinds of contributions to the firm. Form 11 has to be filed before or on the 30th of May every year. A penalty of ₹100 is charged per day for failing to file this form within the deadline.
Filing of Income Tax- Income tax is required to be filed by the LLP every financial year. The due date for the same is 31st July. Moreover, if the turnover of the LLP exceeds Rs. 40 lakhs in the financial year, then it has to get its books audited by a practicing CA. The Income tax return has to be filed before 30th September in the above case. ITR can be filed through the ITR Form 5.
DIR-3 KYC – This form is for the individual designated partners. They are supposed to file the FORM DIR-3 KYC at the MCA portal before 30th September every year. Default in filing the KYC form will lead to deactivation of Director Identification Number (DIN) of the partner and also getting levied Rs. 5000 as penalty.
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