LLPs incorporation & Annual Compliances

LLPs incorporation & Yearly Annual Compliances

www.carajput.com; LLP

www.carajput.com; LLP

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

Minimum Partners Two
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

Limited Liability Partnership Annual Compliances

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

  1. 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

S. No. Event Compliance
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

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Everything That You Need To Know About Limited Liability Partnership

All about the Limited Liability Partnership 

www.carajput.com; LLP

www.carajput.com; LLP

It is a tactful process of incorporation of LLP and it includes a step by step process. LLP is an emerging small business entity practiced in India under a certain act known as LLP Act, 2008. The relaxation of the FDI rules which concerns with LLP has drastically increased the interest amongst certain NRIs and Foreign Nationals.

Advantages of formation of the Limited Liability Partnership

Limited Liability: It is seen that all the partners are equally responsible for the development of the firm. No partner alone is responsible alone for the total profit. There tends to arise a dispute when it comes to sharing the profit. This is why many people hesitate to become partners.

Separate Entity: The LLP is considered as a completely separate entity. It can have a personal name and is liable for his actions.

Right to sued and be sued: It can both sue or be sued in turn.

Simplicity: The process of forming the LLP and maintain it is very simple. A definite meeting, the resolution is not essential to carry this out.

Perpetual existence,

A limited number of members

a large number of partners.

LLP features

  • It has a different legal framework much like a corporation
  • Less Compliance and Legislation
  • The cost of creating an LLP is small.
  • The liability of each partner shall be limited to the contribution made by the partner.
  • No minimum capital contribution requirement

The Duties and Rights Of The Partner In LLP

There are certain rights and duties of a partner that need to be fulfilled by him/her.

General Duties of Partners in LLP:  It is essential for the partners to maintain their business of the LLP. This helps the partner to maintain a just and faithful relationship.

Duty to Indemnify for Fraud: If one makes any loss which is the result of fraud he is required to indemnify for it.

  • Rights of Partners in an LLP
  • The right to conduct the business.
  • The right to maintain the duties which relate to the conduct of his/her business.
  • The majority of partners have the right to settle disputes after hearing the opinion of every partner.
  • The right to inspect and copy accounts of the book if any of the partners dies.
  • Implied authority of partner-
  • The partner has the authority to bind the LLP in case his business way is carried out by the LLP.

Property that belongs to the LLP: The property of the LLP includes all the interests and rights. These were originally brought by the LLPDuties and Partner in LLP. The LLP owns all the money which are got by the developed property and assets of the LLP.

Formation of Limited Liability Partnership (LLP)

Essential documents required for LLP Registration

Here are the details and documents required to register as LLP

Copy of Documents required of Partners:

  • Copy of Residence Proof of Partners
  • Copy of ID Proof and PAN Card of the Partners
  • Copy of Address Proof of the partners
  • Copy of Passport (in case of Foreign Nationals/ NRIs)
  • Copy Photograph

Copy of Documents required of LLP:

  • DSC Certificate
  • Copy of Proof of Registered Office Address

There are certain essential documents that are required for the Indian Nationals to register. These include the –

Pan Card: A copy of the Pan card is essential in the registration process because the pan card number has a unique value.

Address Proof: An address proof stands to be an essential document. The name of the person should be the same which was seen in the Pan card. The current address of the person should be present in it.

Other documents can also be accepted as address proofs. They are the passport, Election Card, Ration Card, Driving License, Electricity Bill, Telephone Bill, and Aadhaar card.

Residential proof:  Along with the address proof, it is required for one to give the residential proof which helps to validate the current address of the Partner. One can accept the Bank Statement, Electricity bill, Telephone bill, and the Mobile bill as the residential proof.

Foreign nationals who are Partners in LLP: It is required for foreign nationals to present certain essential documents. They are a passport, address proof. The driving license, residence card, bank statement, and a form issued by the government which contains your address can be presented as address proof. As residential proof, the bank statement, electricity bill, telephone bill, and mobile bill is accepted.

Registered office proof: There must be some proof that can be used to proof your office address of the LLP.

Subscriber sheet: After getting the approval of the name from the Ministry of Corporate Affairs there is a need for preparing the incorporation documents. They also need to fill by the R.O.C.

Basic Process of LLP Registration 

Step 1: Get DSC

Step 2: Apply for DIN

Step 3: Apply for Name Approval of LLP

Step 4: Filling the formation of LLP form

  • The form used for registration is FiLLiP(Form for the incorporation of Limited Liability Partnership) filed with the Registrar who has jurisdiction over the state in which the registered office of the LLP is located. The type is going to be an interactive form.
  • Fees, as set out in Below, shall be paid.
    This form also provides for the application for DPIN allocation where a person who is to be named as a designated partner does not have a DPIN or a DIN.
  • The application for assignments can be made by only 2 persons.
  • The request for reservations can also be made via FiLLiP.
  • If the name applied for is approved, the approved and reserved name shall be granted as the proposed name of the LLP.

Step 5: finally File LLP Agreement

Filing of an LLP Agreement

The rights and the duties of the partners in the LLP are rightfully governed by the LLP Agreement. It is required to file the LLP agreement within 30 days after the incorporation of the LLP has been done. If one fails to file the LLP agreement within the specified time he has to pay a penalty of Rupees 100 every day. One can be charged a fine up to any limits.

https://carajput.com/learn/annual-filings-of-every-limited-liability-partnerships-llps-for-the-year-201718.html

Cost Involved during the Registration Process of LLP

Following is the Govt. fees for filing forms in LLP Registration:

Step by Step process Govt. Fee and other related Cost  
First Step – DSC DSC Cost should be around INR 2k  for two partners(it can be vary depending on the firm/company)
Second Step – DIN INR 1k for 2 partners
Third Step – Name Reservation from ROC Rs. Two hundred
Fourth Step – Formation filling It depends on the capital contribution made by the Partner.

Capital contribution up to INR 1,00,000/- INR 0.5k

Capital contribution between INR 1,00,000/- to INR 1,00,000/-  INR 2k

Fifty Step – Filling of LLP Agreement It depends on capital contribution.

Capital contribution up to INR 1,00,000/- Rs 50 for filing Form 3 and stamp duty based on the state where LLP is formed

Time to be involved in the LLP registration process

LLP formation from receiving DSC to Filing Form 3 shall take approximately fifteen days, conditional to the availability of all documentation.

LLP Compliance Post-Incorporation

There are some compliance and also procedural matters that are to be finished after the incorporation of a Limited Liability partnership. The post-incorporation of all the compliance required for the company is much lesser than the overall compliance requirement.

Step A: After Incorporation of LLP – Opening a Limited Liability Partnership newly open Bank Account

  • List of following Documents Required for bank account opening
    • Copy of Limited Liability Partnership PAN Card
    • Copy of Resolution for opening and operating LLP bank account

Step B: Limited Liability Partnership Agreement required to be Filing of (Form 3)

  • Time frame: The Limited Liability Partnership must file a duly executed Limited Liability Partnership Agreement with ROC within thirty days of formation.
  • Modes of deposits :
    • Filling of Limited Liability Partnership Agreement is a Contract between Partners.
    • On frailer of compliance, the Penalty is heavy. Per day penalty is Rs. 100 till the Form is filed.
  • Additional Tips
    • Most of LLP miss the Form 3 filing and Due to that LLP end up Pending heavy penalties

Step C: Then Next step is required to Depositing of Share Contribution money into Bank Account

  • Time frame: Within the Stipulated period of the formation of the Limited Liability Partnership, every partner must deposit the contribution into the newly open bank account of LLP.

Step D: You needed to get complete the LLP Goods and Services Tax Registration

    • Time frame:  If your current supply of goods or service is over Rs. 20 lakh, you need to get a Goods and Services Tax (GST) Registration (if your business operates exclusively in the North-Eastern states, Rs. 10 lakh).
  • Tips
    • In case supplying goods or services to another state, need to apply for Goods and Services Tax regardless of turnover.
    • Even online service provider serving customers in another State will instantly attract GST registration.
    • Get Goods and Services Tax registration in one day through CA Rajput

Step E : Ministry of Micro, Small and Medium Enterprises (MSME /SSI) Registration

    • Requirements: MSME /SSI Registration is the procedure to get your Limited Liability Partnership registered under MSME development Act for SME benefits.
  • Tips
    • You may get MSME registration in one day through CA Rajput

Step F: You can get your LLP Trademark Registration

    • Requirements: Many LLP brands in the world value their trademark more than their any other physical assets and want to safeguard it through; Trademark Registration.
  • Tips
    • You may get TM Registration in one day through CA Rajput

Step G: Accounting Process

    • Requirements: you may get your billing, keeping the books of account & cash flow management set right from the beginning
  • Tips
    • CA Rajput gives away free Online Invoicing and cash flow management software with automatic Bank account syncing for its AMC clients which starts CA Rajput

Step H: Limited Liability Partnership Income tax return Filing 

Step I: Limited Liability Partnership ROC Filing of Annual Return

    • Requirements: Every Limited Liability Partnership is required to file its yearly Return (Form 11) with the ROC by 30th of May. The Financials including Profit and loss account & Balance Sheet, (Form 8) to be filed by 30th October.
  • Importance
    • The MCA yearly Filing is an annual event giving details of Management, Financial performance and Governance of Limited Liability Partnership to the MCA under whose jurisdiction the LLP’s registered office is located.

https://carajput.com/learn/what-are-the-duties-of-partners-in-limited-liability-partnership.html

FAQ’s on LLP

Copartaive Stuctute of Start Up 

Q 1. That’s right. Compulsory conditions of LLP Incorporation Designated Partners?

Ans, At least two people have been named as partners. They’re supposed to be staying in India. They are also responsible for carrying out all the actions, matters and items needed by the LLP.

Q 2. What is the Minimum LLP contribution?

Ans,  There are no minimum criteria for the whole contribution of LLP Incorporation. Example: It can also be shaped at least as Rs. 1000/-Capital.

Q 3. Why an LLP model usually pick by professionals?

Ans, Professionals who use LLPs tend to rely heavily on their credibility. Most LLPs are developed and operated by a community of experts with a lot of experience and clients. By pooling capital, partners minimize the cost of doing business while growing the LLP’s growth potential. They can share office space, workers, and so on. Most significantly, lowering costs helps partners to make more money from their operations than they might make on an individual basis.

LLP partners can also have a variety of junior partners in the firm who work with them in the expectation of becoming a full partner eventually. These junior partners are paid a salary and frequently do not have any interest or responsibility in the partnership. The key thing is that they are trained practitioners to carry out the work that the partners put in.

This is yet another way that LLPs are allowing partners to scale up their operations. Junior partners and workers take away the detailed work and free the partners to concentrate on new business.

The opportunity to put partners in and let partners out is another advantage of the LLP. As a partnership arrangement exists for the LLP, the partners can be added or excluded as outlined in the agreement. This comes in handy as the LLP can still add partners to the established company. Usually, the decision to incorporate needs the consent of all current partners.

Q 4 What is LLP stationery 

Ans: LLP stationery

  • LLP Seal: The LLP seal is necessary for opening an account in the bank of a definite company. It is also required for applying for PAN.
  • Letterhead- A letterhead is created along with the name and the registered office of the particular LLP.
  • Book of accounts- A book of accounts in an essential requirement. It can be maintained both manually and through electronic devices.
  • LLP Pan Application- The PAN application to apply for getting the PAN through an online process.
  • LLP Bank Account Opening
  • There are certain documents which are essential to open an LLP bank account-
  • A copy of the agreement of the LLP, the incorporation document, LLP registration certificate, LLP-IN which is issued by the ROC and Pan Allotment letter is required.

Now use CA Rajput’s Expert & Legal Services to register the orgninastion as an LLP.

Our Professional handles your tax compliance and Company/ LLP Incorporation while you are doing what you do best!

For more details on the documentation needed for registration of an LLP, Contract us, T : 9555 555 480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)