All LLPs registered with the Ministry of Corporate Affairs need to file Annual Returns and Statement of Accounts for every Financial Year.
It is mandatory for an LLP to file a return irrespective of whether it has done any business.
In this article, we highlight some of the major LLP Compliance performed post incorporation.
Filing LLP Agreement
- The LLP Agreement governs the rights and duties of partners and the LLP.
- LLP Agreement must be filed with the Ministry of Corporate Affairs within 30 days of incorporation of an LLP.
- LLP agreement is mandatory for all LLPs and even in the absence of a specific LLP Agreement, an LLP Agreement must be executed, specifically excluding applicability of any or all paragraphs of Schedule I (default LLP agreement).
Failure to file LLP Agreement within 30 days of incorporation of an LLP attracts a heavy penalty of Rs.100 per day of default with no ceiling on the maximum fine. Hence, care must be taken to ensure that the LLP agreement is properly executed and filed within the due-date.
- LLP Seal: LLP seal would be required for the opening bank account of the company and for applying for PAN. Hence, two rubber seals – round type with LLP name and LLP name with designation can be purchased on the incorporation of an LLP.
- Letterhead: LLP stationary like letterhead, invoice, official documents, etc., can be prepared with the LLP name and registered office of the LLP.
LLP PAN Application
- PAN card for the LLP can be applied for online post incorporation of an LLP, PAN application (Form 49A) is used for applying for PAN for LLP.
- Once, an application is submitted online, the PAN acknowledgment must be signed and sealed by a Designated Partner of the LLP.
- The signed application must then be couriered to the NSDL office for issue of PAN card. The PAN card of the LLP will be sent to the registered office address of the LLP in 10 – 20 working days.
LLP Bank Account Opening
Bank account for an LLP can be opened easily, as it is considered to be a corporate entity. The following documents of the LLP must be submitted for the opening of LLP bank account:
- Copy of the LLP agreement
- Copy of the Incorporation document and DPIN of the designated partners
- Copy of the LLP Registration Certificate issued by the ROC
- Copy of LLP-IN issued by the ROC
- Copy of the Resolution to open a bank account
- List of authorized person/s with the specimen signatures to operate the account duly attested by Designated Partners
- Copy of PAN allotment letter
All documents must be signed by a Designated Partner and must have the seal of the LLP.
Filing LLP Annual Return
- Annual Return or Form 11 is a summary of an LLP’s Partners.
- It is also an indication of whether there is any change in the management.
- Every LLP must file its Annual Return in Form 11 to the Registrar within 60 days from the closure of a financial year. That is, the Annual Return has to be filed on or before 30th May every year.
Filing Annual Accounts or Statement of Accounts or P&L and Balance Sheet
- All LLPs are required to maintain their Books of Accounts in Double Entry System.
- They also need to prepare a Statement of Solvency (Accounts) every year ending on 31st March. For this purpose, LLP Form 8 should be filed with the Registrar of Companies on or before 30th October every year.
- Form 8 or Annual Statements is applicable to the LLPs registered till 30th September 2016. For LLPs registered after 1st October 2016, the Annual Statements can be filed in 2018.
- It should be noted that LLPs whose annual turnover exceeds Rs. 40 lakh or whose contribution exceeds Rs. 25 lakh are required to get their accounts audited by a qualified Chartered Accountant mandatorily.
Running a business, be it in the form of a one person company(OPC), An LLP or as a Private Limited Company, is not an easy task. It’s an investment of time, money, and effort and also requires the know how of many formalities, regulatory or financial.
Filing of all the forms and returns on time is extremely crucial. Heavy penalties are imposed if the Forms are not filed on time with the Registrar.
HG Corporates can help you with all mandatory compliances for an LLP.
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