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Annual LLP Compliance

Includes ROC compliances for any LLP

Filing of Annual Returns (FORM-8 and FORM-11)

Filing of DIR-3 KYC Form

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    Contents

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    Introduction:

    Annual LLP compliances are crucial for maintaining the smooth functioning of your Limited Liability Partnership (LLP) while adhering to legal requirements. As an LLP offers partners the benefit of limited liability and lower compliance costs, it's essential to meet the annual compliance obligations. Failure to comply with these requirements may result in penalties or the loss of limited liability benefits. In this article, we will explore the unique characteristics of LLPs, the benefits and drawbacks, and the various annual compliance forms that need to be filed.

    Unique Characteristics of LLPs:

    • Limited liability partnerships (LLPs) are distinct legal entities that can hold assets, enter into contracts, and take legal actions on their own behalf.
    • The liabilities of partners in an LLP are limited, and their personal assets are protected, except in cases involving fraud, crimes, or illegal acts.
    • LLPs allow partners to distribute profits according to their preferences and can have natural persons, corporations, or people as partners.
    • LLPs must have a minimum of two partners, with no maximum limit.

    List of Documents Required

    How Does It Works?

    Form Submission

    Callback From Our Team

    Final Quote And Payment

    Document Submission

    Filing of Annual Returns

    Payment of Challans

    Benefits of LLPs:

    Simple to Create: LLP registration is a straightforward process with minimal charges compared to companies, making it an attractive option for entrepreneurs.

    Easy Ownership Transferability: LLPs offer flexibility in joining, leaving, or transferring ownership, allowing partners to manage their roles effectively.

    Taxation Benefits: LLPs enjoy tax advantages, including exemptions from alternative minimum tax and lower tax rates compared to companies.

    No Mandatory Audit: LLPs are not required to undergo a mandatory audit unless their turnover exceeds Rs. 40 lakhs and the contribution surpasses Rs. 25 lakhs.

    Drawbacks of LLPs: Transfer of Interest: The process of transferring ownership or interests in an LLP can be complex and must comply with legal requirements.

    Lack of Acceptance: LLPs, being a relatively new business structure, may face lower acceptance and recognition compared to traditional companies.

    Decreased Credibility: Some people may perceive LLPs as less credible entities, which can affect business operations and partnerships.

    Limited Coverage: LLP formation is not allowed in all states, which can be a disadvantage for businesses operating in those regions.

    Annual Compliances for LLP:

    To maintain an active LLP status, annual compliances are necessary. These compliances involve filing two separate forms each year, namely the Statement of Account and Solvency (Form 8) and the Annual Return (Form 11). Additionally, LLPs must also submit their income tax returns using Form ITR 5. Statement of Account and Solvency Filing (Form 8):
    • Must be submitted within 30 days after the conclusion of the six-month period after the end of the fiscal year or by October 30th.
    • Includes information about the LLP’s assets, liabilities, revenue, expenditure, and a declaration by authorized partners.
    • An active chartered accountant must audit the books for LLPs with turnover or contribution exceeding specified limits.
    Filing of Annual Returns (Form 11):
    • Must be filed within 60 days after the end of the fiscal year or by May 30th.
    • Provides information about the LLP’s partners, capital, and contributions.
    Submitting a Tax Return (Form ITR 5): LLPs must file their income tax returns using Form ITR 5, with deadlines based on their turnover and audit requirements.

    Importance of Annual Compliances for LLP:

    Simple Conversion and Completion: Regular compliance records make the conversion process from a partnership or other company to an LLP smoother.

    Avoid Fines and Maintain Active Status: Failing to file annual reports can result in penalties, default status, and restrictions on partners’ positions in the LLP or other firms.

    Financial Worth Records: Annual filings provide interested parties with access to the LLP’s financial records, enhancing credibility and trustworthiness.

    Enhanced Reputation: Compliance with annual compliances demonstrates a firm’s commitment to legal obligations, leading to a higher reputation and trust among stakeholders.

    Conclusion:

    Annual LLP compliances play a vital role in ensuring the smooth functioning and legal compliance of your LLP. By meeting the annual filing requirements, you can maintain limited liability benefits, avoid penalties, and enhance the credibility of your business. Partner with our team at Instafiling to ensure seamless compliance with annual LLP requirements and enjoy the benefits of limited liability while minimizing compliance costs.

    FAQs

    Limited Liability Partnerships (LLPs) are subject to below compliance requirements to ensure their legal and regulatory obligations are met. These include following:

    • Annual Return (Form-11): The Annual Return provides details about the LLP’s partners, registered office address, and other relevant information. The Annual Return must be filed within 60 days from the closure of the financial year.
    • Financial Statements (Form-8):The financial statements include a Balance Sheet, Profit and Loss Account, and Statement of Changes in Equity and it needs to be filed within 30 days from the end of six months of the financial year.
    • Income Tax Return: LLPs are also required to file an Income Tax Return with the tax authorities. The LLP needs to report its income, deductions, and tax liabilities for the financial year.  

     

    The cost of annual compliance for LLP vary based upon the contribution:

    S.no

    Contribution Amount (In INR)

    Normal Fee (In INR)

    1

    Up to 1,00,000

    50

    2

    More than 1,00,000 up to 5,00,000

    100

    3

    More than 5,00,000 up to 10,00,000

    150

    4

    More than 10,00,000 up to 25,00,000

    200

    5

    More than 25,00,000 up to 1,00,00,000

    400

    6

    More than 1,00,00,000

    600

    INR 1,000 (in case of foreign LLP)

    The above is only the government fees. 

    However, Many LLPs seek the assistance of professionals such as chartered accountants or company secretaries to ensure compliance with the regulatory requirements.The fees for their services can vary based on the complexity of the LLP’s financial statements, tax filings, and other compliance obligations.

    LLP compliance refers to the set of legal and regulatory obligations that Limited Liability Partnerships (LLPs) need to fulfill to ensure their operations are in compliance with the applicable laws and regulations.

    Last date of LLP annual compliance is as per below:

    1. Form-11: Within 60 days from the closure of the financial year.
    2. Form-8: Within 30 days from the end of six months of the financial year.
    3. Income Tax Return: 31st July (if audit is not applicable) and 30th September (If audit is applicable).

    Yes, LLP ROC (Registrar of Companies) compliance is mandatory. LLP ROC compliance includes various statutory filings, such as the registration of the LLP, filing annual returns, submitting financial statements, maintaining statutory registers, and complying with other regulatory requirements. Failure to comply with the ROC requirements can result in penalties, fines, or other legal consequences.

    Yes, LLP needs to file their annual return in Form-11 within 60 days from the closure of the financial year.

    LLP audit is compulsory if the following criteria are met:

    1. If the LLP’s annual turnover exceeds Rs. 40 lakhs in any financial year.
    2. If the contribution of the LLP exceeds Rs. 25 lakhs at any point during the financial year.

    In India, there is no minimum turnover requirement specified for LLPs. LLPs are required to maintain proper books of accounts and prepare financial statements and file their annual return regardless of the turnover.

    Form-11 needs to be filed for filing the annual return of the LLP within 60 days from the closure of financial year.

    The concept of renewing an LLP typically does not exist in most jurisdictions. Once a Limited Liability Partnership (LLP) is registered, it continues to exist until it is voluntarily dissolved or struck off by the regulatory authority for non-compliance or other valid reasons.

    No, at least one year should have been elapsed to close the LLP.

    No, an LLP cannot be closed without filing the annual return. Filing the annual return is a mandatory compliance requirement 

    LLP audit is compulsory if the following criteria are met:

    1. If the LLP’s annual turnover exceeds Rs. 40 lakhs in any financial year.
    2. If the contribution of the LLP exceeds Rs. 25 lakhs at any point during the financial year.

    The Annual compliances for the LLPs include following:

    • Annual Return (Form-11): The Annual Return provides details about the LLP’s partners, registered office address, and other relevant information. The Annual Return must be filed within 60 days from the closure of the financial year.
    • Financial Statements (Form-8):The financial statements include a Balance Sheet, Profit and Loss Account, and Statement of Changes in Equity and it needs to be filed within 30 days from the end of six months of the financial year.

    Income Tax Return: LLPs are also required to file an Income Tax Return with the tax authorities. The LLP needs to report its income, deductions, and tax liabilities for the financial year.

    Yes, Form 8 is mandatory for all the LLP’s incorporated on or before 30th September of the previous financial year.

    LLPs (Limited Liability Partnerships) do not typically hold board meetings like companies with a board of directors. LLPs are structured as partnerships, and the decision-making authority rests with the partners.


    Instead of board meetings, LLPs usually hold partner meetings or partners’ meetings to discuss and make decisions on matters related to the LLP’s operations, financials, and other significant issues.

    Compliance with the Registrar of Companies (ROC) is necessary for LLPs (Limited Liability Partnerships) due to legal requirements and to enhance transparency and accountability.

     

    Failure to comply with ROC requirements can result in penalties, fines, or legal consequences, including the possibility of the LLP being struck off or dissolved.

    The Designated Partners are held responsible for the compliances of an LLP.

    Form-11 needs to be filed for filing the annual return of the LLP within 60 days from the closure of financial year.

    Yes, annual compliance still needs to be filed even if there is no transaction in the business during any year.

    Yes, a previously registered partnership firm can be converted into LLP in accordance with the Section 55 and Second Schedule of the LLP Act, 2008.

    Failure to file Form 11 and Form 8 can result in penalties, fines, or legal consequences, including the possibility of the LLP being struck off or dissolved.

    Form 11 can be certified by the Designated Partners  if  total obligation of contribution of partners of the LLP does not exceed Rs. 50 lakhs or turnover of LLP does not exceed Rs. 5 crores.


    If the obligation of contribution of partners of the LLP is greater than or equal to Rs. 50 lakhs or turnover of LLP greater than or equal to Rs. 5 crores, then the webform needs to be certified by a Company Secretary in whole time practice.

    Yes, annual compliance still needs to be filed even if LLP has not conducted any business in a financial year.

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      Registration Types

      Private Limited Company Incorporation

      One Person Company Incorporation

      Section 8 Company or NGO Incorporation

      Limited Liability partnership Incorporation

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