POST INCORPORATION COMPLIANCES FILINGS OF LLP

MAJOR COMPLIANCES & DUE DATE OF ANNUAL FILINGS OF EVERY LIMITED LIABILITY PARTNERSHIPS

Every Limited Liability Partnerships (LLPs) which are registered with the Ministry of Corporate Affairs (MCA) have to file the Annual Returns and Statement of Accounts for the FY 2018. here are three main compliances which should be red-flagged by all the designated partners of LLP:-

  • Preparation and filing of Annual Return under the LLP Act, 2008;
  • Preparation and filing of Financial Statements of the LLP
  • Filing of Income Tax Returns under the Income Tax Act, 1961.

The majority of the Stakeholders are ambiguous to the fact that whether filings of the Annual Returns are the mandatory thing even if they are not doing the business?

& the answer to the dubious question is YES! Every LLP has to be compliant even if there are no operations in the organization.

It is the responsibility of the organization to file all the required documents even if there are no operations or business during the financial year.

POST INCORPORATION COMPLIANCES FILINGS OF LLP

Let’s understand which LLP’s have to file the Annual Returns and Income Tax Return for the year 2018:

(I) FILING ANNUAL RETURN OF LLP:-

Annual Returns in LLP i.e… Form 11 is a Summary of LLP’s Partners like whether there are any changes in the management of the LLP.

Every LLP is required to file Annual Return in Form 11 to the Registrar within 60 days from the closure of the financial year i.e. the Annual Returns has to be filed on or before 30th May every year and for the financial year ended on 31st March 2018 the last date for filing the annual return is 30th May 2018.

Note:- Form 11 or Annual Return is Applicable on those LLPs which are registered until the 30th of September 2017. If your LLP is registered on or after the 1st October 2017 then you do not require to file LLP Annual Return in the year 2018.

(II) FILING ANNUAL ACCOUNTS OR STATEMENT OF ACCOUNTS OR P&L AND BALANCE SHEET:-

Every LLP or any other legal entity from a solo firm to a Private limited company has to prepare their accounts to get the information regarding your business that how much profit is earned by your LLP.

Every LLP has to close their accounts till 31st March 2018 this year. They are required to maintain the Books of Accounts in the Double Entry System and has to prepare a Statement of Solvency (Accounts) every year ending on 31st March.

LLP Form 8 to be filed with the Registrar of LLPs on or before 30th October every year. Therefore, 30th October 2018 is the last date for filing annual accounts this year.

Note:– Form 8 or Annual Statements for the year 2018 is applicable to those LLP which is registered till the 30th of September 2017. If your LLP is registered on or after the 1st September 2017 then you do not require to file LLP Annual Statements in the year 2018.

(III) FILING INCOME TAX RETURNS FOR THE LLP:-

Every LLP has to file the Income Tax Returns for the year 2018. In simple words, LLP is a separate legal entity so with the partner’s income tax return you have to always file the LLP Income tax return where you show your LLP’s Income and calculate the tax liability and pay the taxes to the government of India. LLP have to calculate their tax liability from their financial statements for the year 2018.

Mostly Income Tax Return the Last date is 31st July 2017 (unless extended) this year for the Individual and legal entities. However, in the case where an Audit is required, the last date for filing Income Tax returns is 30th September 2018.

If the LLP has not carried any business during the year ended 31.03.2018, the LLP has to file a NIL IT RETURN with Income Tax Authorities.

Note:- Filing of Income Tax Return is Applicable on all the LLPs which are registered during the financial year 2017-18. Therefore, it’s not a matter if your LLP is registered after 01-10-2017 still you have to file an Income tax return from the date of incorporation till 31-03-2018.

AUDIT REQUIREMENT UNDER LLP ACT, 2008:-

Only those LLPs whose annual turnover exceeds Rs. 40 lakhs or whose contribution amount exceeds Rs. 25 lakhs are required to get their accounts audited by a qualified Chartered Accountant. Meaning thereby, All the statements of accounts are certified by the CA.

AUDIT REQUIREMENT UNDER INCOME TAX ACT, 1961:-

Audit of accounts is a mandatory requirement under the Income Tax Act when the annual turnover of LLP is more than Rupees one hundred lakhs.

CERTIFICATIONS FROM COMPANY SECRETARY IN PRACTICE (PCS):-

In case of LLPs with turnover more than five crore rupees in a financial year or contribution more than Rupees fifty lakh, the annual return shall be certified by a Company Secretary in Practice.

A Summarised way Post Limited Liability Partnership formation return  Compliances is prescribed below:-

S. No. Particulars Due Date/Status
1) LLP Agreement Form 3 It is required within Thirty days of the formation of Limited Liability Partnership
2) Filling of PAN Application It is essential Required to be obtained PAN immediately, acts as an identification number for every taxpayer, and is required for opening Bank Account also
3) Freshly Opening of Bank Account in Limited Liability Partnership Name The current account needs to be opened for carrying out business transactions
4) Statement of Account and Solvency in Form 8 It required to be file within 30 days from the end of six months of the FY to which it relates
5) Annual Return of Limited Liability Partnership- Form 11 * It required to be file within  sixty days of closure of the FY
6) Filing of ITR Return

If an Audit is not required to be made

if an Audit is required to be made

 

31st of July every year

30th of Sept every year

7) KYC Compliance of designated Partner’s it should be completed on or before the thirty of Sept every year
8) Compulsory  Audit of Accounts of books of Account If Capital contribution exceeds twenty-five Lakhsor Turnover exceeds Rs. forty Lakhs

CONSEQUENCES FOR NON-FILING LLP ANNUAL RETURNS AND ACCOUNTS:-

If there is a delay in filing Form No. 8 and Form No. 11 of LLP, you will have to pay a penalty as applicable on today’s date. If the filing is not done within the stipulated time, there is a penalty of Rs. 100 per day till it is compiled. You cannot close or wind up your LLP without filing Annual Accounts.

So if you don’t file mandatory forms on time with the MCA, your LLP turns into unlimited statutory liability until the day it is compiled.

The provisions of the Act require LLPs to file the documents like Statement of Account and Solvency (SAS) in Form 8 and Annual Return (AR) in Form 11 within the time specifically indicated in relevant provisions.

The LLP Act contains provisions for compounding of offenses which are punishable with fine only. Further, for defaults/non-compliance on procedural matters such as time limits for filing requirements provisions have been made for charging default fees (on daily basis) in a non-discretionary manner. To avoid the consequences of heavy penalties, it would be advisable to comply on time within the stipulated due date of filing.

Actions are taken by Registrar of Companies against the LLPs who have not filed their Returns and Statement of Accounts:-

Apart from the above consequences and penalties, the Registrar has the right to strike off the LLPs who are not filing their Financial Statements (Form 8) and Annual Returns (Form 11) for a period of two immediate financial years.

In the line of the above right and under the provisions of Section 75 of the LLP Act, 2008 read with Rule 37 of the LLP Rules, 2009, the following registrar of Companies has issued the public notice proposing striking of the name of LLPs who are not filing their Annual Returns and Financial Statements:

It is advisable for all the Designated Partners to complete their Annual Filings in respect of LLPs to avoid striking off the name of LLPs and prevent the disqualification of DPIN (DIN).

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)

CHECKLIST FOR INCORPORATING WHOLLY OWNED SUBSIDIARY COMPANY

CHECKLIST FOR INCORPORATING WHOLLY OWNED SUBSIDIARY COMPANY

Formation of A Wholly Owned Subsidiary Company In India

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www.carajput.com; Registered your work

Company Registration in India

This Article is provides information about the stages and documents required for incorporation of a private limited company in India which is subsidiary of a foreign company in India. The procedure for registering a subsidiary company in India is very simple and will take around a maximum of 15 days to complete. The followings are the detailed requirements, procedure and system for subsidiary formation in India

A private company is defined under Section 3(1)(iii) of the CA Act  as a company which

  • Has a minimum paid up share capital of INR 100,000 or a higher paid-up capital as may be prescribed by its articles of association
  • Restricts the right to transfer shares by its articles of association.
  • Prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company.
  • Prohibits any acceptance of deposits from persons other than members, directors or their relatives.
  • Can be formed with a minimum of two members and two directors.
  • Limits the number of its members (shareholders) to fifty not including (i) persons who are in the employment of the Company and (ii) persons who, having been formerly in the employment of the Company, were members of the Company while in that employment and have continued to be members after the employment ceased.

Therefore, minimum capital required for incorporation of a private company is Indian Rupees 1(one) lakh and there should be at least one two members (shareholders) and two directors)

Incorporation of a private limited company in India broadly involves the following stages:

STAGE – I

Obtaining Directors Identification Number (Din) & Digital Signatures

Directors Identification Number (DIN)

Prior to incorporation of a company, the proposed directors of the company are required to obtain Directors Identification Number (“DIN”) from the Ministry of Company Affairs by making an online DIN application in Form DIN 1. Form DIN 1 is approved by the DIN Cell of the Ministry of Corporate affairs.

The said Form DIN 1 is to be filed with the scan copies of the applicant’s photograph, identity proof, a valid residential proof and a verification/ declaration in the prescribed format to be given by the applicant (who is applying for the DIN). Upon online submission of the Form DIN 1 and online payment of the fee, a permanent DIN to the director will be allotted immediately.

The following documents are required to make a DIN application for each of the proposed director(s):

(i) Identity proof

For identity proof, a copy of passport or copy of permanent account number card (PAN card) is required to be provided. Please note that in case of a foreign national only passport is acceptable as identity proof and in case of an Indian national copy of PAN card is must.

(ii)Residence proof

For residence proof, a copy of voter’s identity card or valid driving licence or latest bank statement duly certified by the respective bank or utility bill (not older than two months) is required to be provided.

(iii) One passport size color photograph in jpeg format. In addition one more photograph is required which should be separately pasted on a plane paper.

(iv) Verification/ Declaration in the prescribed format on a 10 Rupees stamp paper, duly notrized by a notary public.

All the aforementioned documents should be attested by a notary public in the country of residence of the applicant.

Digital Signature Certificate (“DSC”)

Any one of the proposed directors is required to obtain digital signature certificate (“DSC”) in India for online filing of e-Forms with the concerned Registrar of Companies (“ROC”). For obtaining DSC an application is made under the signatures of the director who intends to obtain DSC along with the copy of his identity proof and a copy of his residence proof.  The following documents are required to make a DSC application for each of the proposed director(s):

(i) Identity proof

For identity proof, a copy of passport or copy of permanent account number card (PAN card) is required to be provided. Please note that in case of a foreign national only passport is acceptable as identity proof and in case of an Indian national copy of PAN card is must.

(ii) Residence proof

For residence proof, a copy of voter’s identity card or valid driving license or latest bank statement duly certified by the respective bank or utility bill (not older than two months) is required to be provided.

(iii) One passport size color photograph. Please note that the photograph should be pasted on the application form and cross signed by the director (applicant).

(iv) DSC application form duly signed by the director (applicant)

The identity and residence proof of the applicant as aforesaid should be attested by a notary public in the country of residence of the applicant.

STAGE – III

Application for Name Approval of the Proposed Company With The ROC

After obtaining the DIN and DSC as aforesaid, an online application for availability of the proposed name (in the prescribed Form 1A), along with six proposed names in order of preference (may be less than six), each one indicating, as far as possible, the main objects (principal activities) of the company, shall be submitted to the ROC. The name of a private company should end with the words “Private Limited”.

If the proposed company is a subsidiary of body corporate incorporated outside India, Form 1A is required to be e-filed along with the following attachment at the website of Ministry of Company Affairs, India:

(a) Board Resolutions by the parent company (separately from each subscriber to the proposed entity) indicating its intention to incorporate a subsidiary in India and authorizing a director to issue specific power of attorney.

(b) Power of Attorney (s) (separately from each subscriber to the proposed entity) authorizing someone to represent the subscribers before the concerned ROC to liaise with  all concerned authorities and officials in the matter of incorporation.

(c)    No Objection Letter from the parent company (separately from each of such   entity whose name or part thereof will be used in the name of the proposed entity) for use of the name of the parent company or part thereof in the name of the proposed company.

(d) Charter Documents of the parent company i.e. Certificate of Incorporation of the  parent company.

Please note that all of the aforementioned documents should be notarized by a Notary Public in the country where the registered office of the entity (which has issued the said document), is situated and further Apostilled/ endorsed at the Indian Consulate in the country where the registered office of the entity (which has issued the said document) is situated.

(e) A brief writ-up on the main objects proposed to be carried out by the Company.

(f) Proof of ownership of the registered office of the company. In case the property is not taken on lease by the Company himself, a no objcetion certificate would be required

STAGE IV

Drafting And Stamping of Memorandum & Articles of Association (“MOA and AOA”)

MOA and AOA are to be drafted in compliance with the provisions of the Act. Adequate stamp duty would be required to be paid thereupon based on the authorised capital of the company. The stamp duty on MOA and AOA shall be paid along with the filing fee payable at the time of filing of incorporation related documents

STAGE V

INCORPORATION DOCUMENTS TO BE FILED WITH THE ROC

After the name approval, the following forms have to be e-filed with the ROC after having been digitally signed by any of the proposed directors. The lists of documents are as follows:

(i)    Form 1 –   Declaration of compliance of all the requirements of the Act along with the memorandum of association of the company;

(ii)   Form 18 – Situation of the registered office of the Company; and

(iii) Form 32 – Particulars of Directors of the Company along with the consent of directors.

All the aforesaid incorporation documents (scanned copies of the executed version) have to be submitted with the ROC as attachments to the E form 1 alongwith:

(i) The original copies of MOA and AOA with the subscriber pages duly executed by or on behalf of the subscribers and witnessed.

(ii) Power of Attorneys from the subscribers to the MOA and AOA appointing representatives to incorporate the company and to make corrections in the MOA and AOA. The said powers of attorneys are required to be notarized and attested by Indian embassy abroad.

The ROC then scrutinizes the above-mentioned documents and if necessary, directs the authorized person to make necessary corrections therein. The ROC after being satisfied that all the documents are complete, issues the certificate of incorporation of the Company, which is the conclusive proof of registration of the company in India.

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; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 9555555480

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)