LLPs incorporation & Yearly Annual Compliances
LLPs incorporation & Annual event-based compliances
It is a tactful process and it includes a step by step process. LLP is an emerging small business entity practiced in India under a certain act known as the Limited Liability Partnership Act, 2008. The relaxation of the FDI rules which concerns Limited Liability Partnership has drastically increased the interest amongst certain NRIs and Foreign Nationals.
Limited Liability Partnership (LLPs) requirements at the time of Incorporation
|Maximum Partners||No Limit|
|Minimum Designated Partners||at least one designated partner shall be resident in India|
|Designated Partners Identification Number||All the designated partners shall obtain Designated Partners Identification Number (DPIN) by filing E-Form no. 7 online on the Limited Liability Partnership Portal.|
|Filing Fee for E-Form no.7||Rs.100/-|
|Documents Required for obtaining DPIN||1) Proof of identity,2) Proof of residence,
3) Latest passport size photograph
4) Digital Signature Certificate
|Digital Signature Certificate (DSC)||Mandatory for all the Designated Partner|
|Financial year||Financial year means the period from the 1st April to 31st March of the following financial year.|
|Reservation of Name of Limited Liability Partnership||E-Form no.1 is filed for reservation of name of Limited Liability Partnership|
|Filing Fees for E-Form no.1||Rs.200/-|
|Registration/Incorporation Document||E-Form no. 2|
|Filing Fees for E-Form no.2||(a) If a contribution does not exceed Rs. 1 lakh – Rs. 500(b) If the contribution is between Rs. 1 lakh to Rs. 5 lakhs – Rs. 2000
(c) If contribution is Rs. 5 lakh to Rs. 10 lakhs – Rs. 4000
(d) If the contribution is more than Rs. 10 lakh – Rs. 5000
|Registration of Limited Liability Partnership Agreement||E-Form no.3|
|Filing Fees for E-Form no.3||The difference between the fees payable on the increased slab of contribution and the fees paid on the previous slab of contribution shall be paid through E-Form no.3|
|Notice of Appointment of Partner/ assigned Partner and their consent||E-form no.4|
|Filing Fees for E-Form no.4||(a) If a contribution does not exceed Rs. 1 lakh -Rs. 50(b) If the contribution is between Rs.1 lakh to Rs.5 lakhs – Rs. 100
(c) If the contribution is between Rs. 5 lakhs to Rs.10 lakhs – Rs. 150
(d) If the contribution is more than. 10 lakh – Rs. 200
Each Limited Liability Partnership registered pursuant to the requirements of the Limited Liability Partnership Act, 2008 is required to send the following forms to the Income Tax Portal/MCA Portal:
Yearly Limited Liability Partnership return – Form 11
- With reference to Section 35(1) of the Limited Liability Partnership Act, 2008, all Limited Liability Partnership is expected to file Form 11 with the Registrar of Companies within 60 days of the end of the financial year, i.e. by 30 May 2019.
- The number and information of the partners and the assigned partners must be entered.
- Attachments: descriptions of the Companies/ Limited Liability Partnership’s where the Appointed Partner is the Partner/Director.
- To be DSC signed by the Appointed Partner and approved by a licensed practitioner.
- Penalities of Rs. 100/-per day for non-filing. There are also other penal regulations.
Yearly filling required for Account Statement and Solvency – Form 8
- With reference to Section 34(2) of the Limited Liability Partnership Act, 2008, each Limited Liability Partnership shall file Form 8 of the Account and Solvency Statement within 30 days from the end of the six months following the end of the financial year and, accordingly, the same shall be filed by 30 October 2019.
- There is no specified format for preparing the financial returns of the Limited Liability Partnership and, therefore, the accounts are drawn up in the format given in Form 8.
- Attachments: Report under the MSME Creation Act 2006, Audited Financial Statements (if applicable), and Declaration of Contingent Liability, where applicable
- The form must be DSC signed by both the Appointed Partners, the Auditor (if any), and the practicing practitioner.
- The penalty of Rs. 100/-per day for non-filing. There are also other penal provisions.
Notes: Penalty for non-compliance:
The Limited Liability Partnership and it’s every partner shall be punishable with a fine of Rs 10000 & maybe extended to Rs 5,00,000.
In the absence of a Limited Liability Partnership Agreement, Schedule I to the Limited Liability Partnership Act, 2008 is applicable.
Every Limited Liability Partnership should mandatorily file E-Form no.3 and E-Form no.4 within 30 days of incorporation failing of which Rs.100/- per day will be charged as additional fees on each Form.
Income Tax Return Filing compliance by LLP– In the filling of ITR 5
Every Limited Liability Partnership Registered shall file ITR Return filling in ITR-5 within the below prescribed time limit:
|PARTICULARS REQUIRED TO BE MADE||DUE DATE OF Limited Liability Partnership|
|All Registered Limited Liability Partnership which yearly Turnover of less than Rs. forty lakhs in the previous financial year or Limited Liability Partnership where the partner’s obligation of contribution is less than Rs. Twenty-five lakh. (not required to get their accounts audited)||Required to file ITR on or before 31st July.|
|All Registered Limited Liability Partnership having a turnover of Exceed Rs. forty lakhs and/or partner’s capital contribution of exceeding Rs.Twenty-five lakhs. (required to get their accounts audited)||Required to file ITR on or before 30th September.|
Limited Liability Partnership – Event Based Compliances
|Head||Section||Compliance||Penalty for Non-Compliance|
|Procuring Designated Partners Identification Number||7(6)||Every Designated Partner should obtain a DPIN from the Central Government||Every partner shall be punishable with fine which may extend to Rs 5000 and where the contravention is continuing one, with further fine, which may extend to Rs 500 for every day during which the default continues.|
|Consent and Particulars of Partner/assigned Partner||7(3) & 7(4)||Filing of the consent of Partner/ Designated Partner to act as such with the ROC in E-Form no.4 within 30 days of the appointment as the designated partner||The Limited Liability Partnership and it’s every partner shall be punishable with a fine which shall not be less than Rs. 10,000 & maybe extend to Rs. 1,00,000|
|Vacancy of Designated Partner||9||Filing of a vacancy in Designated Partner within 30 days of vacancy and intimation of same to Registrar in E-Form no.4 and in case if no designated partner being appointed then each partner shall be deemed to be the designated partner||The Limited Liability Partnership and it’s every partner shall be punishable with fine which shall not be less than Rs. 10,000 but which may be extend to Rs. 1,00,000.|
|Change of Registered Office||13(3)||File the notice of any change in the registered office with the Registrar of Companies in E-Form no. 15 and any such change shall take effect only upon such filing.||The Limited Liability Partnership and it’s every partner shall be punishable with fine which shall not be less than Rs. 10,000 but which may be extended to Rs. 1,00,000.|
|Change of Name||1||Limited Liability Partnership may change its name registered with the Registrar by filing with the Registrar notice of such change in E-Form no. 5.||A person guilty of an offense shall be punishable with a minimum of Rs.5000 to Rs.500000 and with a further fine which may extend to Rs 50 for every day after the first day after which the default continues|
|Name of Limited Liability Partnership on Invoice and official Correspondence||21(1)||All invoices and official correspondence of the Limited Liability Partnership shall include its name, address and registration number and a statement that it is registered with Limited Liability||The Limited Liability Partnership shall be punishable with a fine which shall not be less than Rs 2000 but which may extend to Rs 25,000.|
|Limited Liability Partnership Agreement & Changes therein||23(2)||Limited Liability Partnership Agreement and any changes made therein shall be filed with the Registrar in E-Form no. 3.||A person guilty of an offense shall be punishable with a minimum of Rs 5,000 & maximums 5,00,000 and with a further fine which may extend to Rs 50 for every day after the first day after which the default continues.|
|Change in Partners||25(2)||Where a person becomes or ceases to be a partner or where there is any change in the name or address of a partner, notice of the same signed by the designated partner and to be filed within 30 days to the Registrar in E-Form no. 4.||The Limited Liability Partnership and every designated partner of the Limited Liability Partnership shall be punishable with a fine minimum of Rs 2000 & a maximum of 25,000.|
|Books of Accounts||34(1)||The Limited Liability Partnership shall maintain proper Books of Accounts for each year on a cash basis or on an accrual basis and according to the Double Entry System of Accounting at its registered office and shall get them audited in accordance with the rules as may be prescribed||The Limited Liability Partnership shall be punishable with fine minimum of Rs. 25,000 and maximum Rs 5,00,000 and every designated partner of such LIMITED LIABILITY PARTNERSHIP shall be punishable with fine minimum Rs 10,000 & maximum 1,00,000|
Basic Event Based Compliances for LLP
|1.||Resignation/Appointment of Partner/Designated Partner||Required to be file Form 3 and Form 4 (As linked Forms)|
|2.||In the case of Change in Name of LLP||Required to be file Form 5|
|3.||In the case of Registered Office address Change||Required to be file Form 15|
|4.||Changes in LLP agreement||Required to be file Form 3|
|5.||While Strike off name of the LLP||Required to be file Form 24|
|6.||While DIN Application||Required to file DIR-3|
|7.||In case the change in particulars of Director||Required to file DIR-6|
Limited Liability Partnership – Annual Compliances
|Head||Section||Compliance||Penalty for Non-Compliance|
|Statement of Accounts & Solvency||34(2)||The Limited Liability Partnership shall within a period of 6 months from the end of every financial year prepare and file a Statement of Account and Solvency with the ROC in E-Form no. 8.||The Limited Liability Partnership shall be punishable with a fine minimum of Rs. 25,000 and maximum Rs 5,00,000 and every designated partner of such Limited Liability Partnership shall be punishable with a fine minimum of Rs10,000 & maximum Rs 1,00,000|
|Annual Return||35(1)||The Limited Liability Partnership to file Annual Return compliance to the ROC within 60 days of closure of the financial year in E-Form no. 11.||The Limited Liability Partnership shall be punishable with a fine of a minimum of Rs 25,000 & maximum of Rs 5,00,000 and every designated partner of such Limited Liability Partnership shall be punishable with a fine of a minimum of Rs 10,000 & maximum of Rs 1,00,000|
Notes: 1) Every Limited Liability Partnership has to file E-Form no.11 within 60 days from the date of closure of the financial year without any additional fee and later additional fees ofRs. 100/- per day of delay.
2) Financial year in relation to Limited Liability Partnership means the period from the 1st April to 31st March of the following financial year. Provided that in case of Limited Liability Partnership incorporated after the 30th day of September of a year, the financial year may end on the 31st March of the next following year