Overview

• Limited Liability Partnership is an individual / separate legal entity registered under the Ministry of Corporate Affairs (MCAs) in India. For registration in LLP, there should be at most two limited persons as partners where there is essentially one Indian citizen and one resident. Partners in an LLP must take responsibility for maintaining a proper book of accounts, filing an income tax return and submitting an annual return with the Ministry of Corporate Affairs (MCA) every financial year.
• To establish a limited liability partnership (LLP), returns must be filed periodically to maintain compliance and avoid substantial penalties under the law for noncompliance. Only some compliance with limited liability partnerships is successful every year which is certainly low because compliance must be placed on private limited companies. However, the penalty seems quite large. While a private limited company can levy INR 1 lakh in terms of non-compliance only penalty, it can levy LLP of up to INR 5 lakh.
• Limited liability partnerships receive a separate legal entity; Therefore, it is up to the duties of elected partners to maintain a proper book of accounts and to annually file annual returns with the Ministry of Corporate Affairs (MCA). Limited liability partnerships are not required to audit their 'books of account' where their annual turnover is more than INR 40 lakhs or if the investment or contribution in the company is more than INR 25 lakhs. Therefore, an LLP is not required to conduct an audit of its books of account if it satisfies the condition stated above, making the annual filing process simpler.
• Limited Liability Partnerships are required to file their Statement of Account & Solvency within thirty (30) days from the end of six (6) months of the financial year and Annual Return within sixty (60) days from the end of the fiscal year. Dissimilar to Companies, Limited Liability Partnerships are mandatorily required to maintain the financial year, from April 1st to March 31st. Hence, the Statement of Account & Solvency is to be filed on or before October 30th of every fiscal year, and the annual return for LLPs is due on May 30th every year, even if the LLP has not completed any business in that specific financial year. Some of the annual filings are mandatory whether the LLP has begun any business or not.

Protection of limited liability partnership

Important Benefits: The powers gained by LLP are as follows:

• Right to sue and sue.
• Bank account opening powers.
• powers to appoint persons.
• The right to engage in all types of legal contracts.

• In an LLP, one partner is not accountable or liable for another partner’s misbehaviour or negligence.
• The affiliates of an LLP have the right to directly maintain the business.
• A LLP provides limited liability protection for owners.
• If the number of partners decreases by 2, the only partner can still find a new partner to fill the space.
• During post installation, an LLP may have limitless partners.
• If there is only one partner in the LLP, then it is time to find a new one externally, and also without dissolution of the LLP.
• It is a separate legal entity.
• LLP has assets and accounts that are different from promoters.
• A LLP partner can raise funds from banks and NBFCs.

Checklist

• The annual return has to be filed with the Registrar of Companies (ROC).
• Filling and filling of annual returns as per the prescribed format of LLP Form 11
• It needs to be filed within 60 days of the close of the financial year. This can be done on 30 May of each year.
• LLP Annual Compliance Every registered LLP must meet, even if there is no marketing activity. It also has to be obtained whether the LLP is closed and whether the business bank account exists.

Required Documents

• PAN Card & COI: PAN Card and Certificate of Incorporation of LLP
• LLP agreement: LLP agreement with any supplementary agreement, if any
• Financial statement: LLP's financial statement is duly signed by the designated partners
• Digital signature: DSC is required for all named partners
• LLP Identification Number: Verification
• LLP Name: Proof Title
• Registered Office Address of LLP: Documentation Required Regarding Location
• Business Classification of LLP: Business / Service / Business / Other Record
• Major Business Enterprises of LLP
• Nominated partner and partner aspects of LLP
• Total responsibility for the contribution of partners of LLP
• Total input supported by all LLP partners
• Review of Named Partners and Partners
• Details of the fine imposed on the LLP, if any
• If there is any
• LLP and or characteristics of the company in which the partner holds the position of director / partner.

Registration Process

• End-to-end support for LLP compliance.
• We have expertise in developing LLP annual compliance programs customized for LLP with a continuous reminder method and keep a solid track of your legal LLP compliance.
• We update on the development on adjustment as per LLP Registration Act 2008, which is of absolute importance.
• We provide free consultations on commercial enterprise establishments.

Timeline:

• LLP Annual Filing: We are required to file a required annual return for LLP with MCA and maintain annual compliance.
• Preparation of Annual Returns: There is a need to make annual returns based on financial and production during the last financial year.
• Annual Return Verification: There is a need to prepare annual returns based on the submitted specifications and confirmation and approval.
• Finalization: After endorsement, file annual returns with the Ministry of Corporate Affairs adjacent to the required accessories.

Credential for assistance

• Declarations of Accounts and Solvency

  All registered LLPs are expected to have their books of accounts in place and fill in data concerning the profit made, and other economic data in regards to sales, and submit it in Form 8, each year. Form 8 must be attested by the impressions/signatures of the designated partners and should also be certified by a practicing 'chartered accountant' or a practicing 'company secretary' or a practicing 'cost accountant.' Neglecting to file, the statement of accounts & solvency records within the designated due date will lead to a fine of INR '100' per day. The due date to submit form 8 for the financial year 2017-18 is October 30, 2018.

• Arranging Annual Return

  Annual Returns are to be submitted in the designated Form-11. This Form is to be entertained as a summary of the management affairs of LLP. These are like numbers of partners, simultaneously with their names. However, form 11 has to be filed by May 30 every year.

• Filing and Audit obligation under the Income Tax Act

  As explained earlier, Limited Liability Partnerships whose turnover is higher than INR 40 lakh or whose participation has exceeded INR 25 Lakh have to get the books of account audited by practicing 'Chartered Accountants.' The last date to file the tax return for an LLP, which is supposed to get his books evaluated, is September 30.

Latest Tax Structure

• The entrance limit of Rs 1 crore for a tax audit is proposed to be raised to Rs 5 crore with influence from AY 2021-22 (FY 2020-21) if the taxpayer's cash records are restricted to 5% of the gross receipts or annual turnover, However, and if the taxpayer's cash payments are limited to 5% of the aggregate payments. For LLPs in mean tax audit is not required deadline, the due date for tax filing is July 31. 
• For LLPs which have certified indulged into any international transactions with associated buisiness or have undertaken particulat Domestic Transactions they are meant needed to file Form 3CEB. A practicing Chartered Accountant should verify this Form. Limited Liability Partnerships that are expected to submit this Form can do their tax filing by November 30. Moreover, LLPs should file their income tax return in Form ITR 5. This Form could be presented online via the income tax website with the help of the selected partner's digital signature.

Tax Structure of LLP 2019-20: 30% -low

• Overburden:

  A surcharge will extend the measure of income tax at the rate of 12% of such tax, where the total income exceeds Rs. 1 crore rupees. Mostly, the surcharge will be subject to nominal relief. This is where revenue exceeds Ra. 1 crore, total cost payable as income tax. The tax does not pass the total amount payable as income tax on the revenue of Rs. 1 crore more than the income of more than Rs. 1 crore rupees.

• Health and education blueprint:

  The amount of income tax and surcharge mentioned should be measured by the health and education cess at the rate of 4% of those income tax and surcharge.

• Optional merist tax:

  Tax due by LLP cannot be less than 18.5% (raised by Surcharge and HEC) of "adjusted total income" as per 'section 115JC'.

Privileges for LLP as per private limited company

• Exceptions to the Minutes Book, Protection of Statutory Registers, and Adjustable Tax Rates.
• AGM is not a mandate for an LLP. The AGM is already in a one-year gathering for shareholders of the company. Since there is no principle of stake in LLP, no AGM should be held.
• A board meeting is usually associated with a conference of the board of directors. The LLP includes no directors, runs the business rather than selected partners and is held responsible for compliance. Therefore, a board of partner meeting is suggested in the event of an LLP firm.
• There is no limit on the highest number of partners.

Understanding Form 11

Form 11 is an annual return, to be filled by all LLPs irrespective of turnover during the entire year. Even when an LLP does not convey any service or business during the business year, a Form 11 filing is required. Apart from the required data about the name, address of LLP, details of partners / nominated partners, other information required to be submitted are: / / />

• Total promotion or contribution by / to LLP partners
• Features of notices received against penalties / compounding offenses committed during the financial year which should be e-filed at the MCA Gateway. A pre-fill option is available to reduce your efforts as well.

Documents to be submitted with Form 11

Privileges for LLP as per private limited company

• Exceptions to the Minutes Book, Protection of Statutory Registers, and Adjustable Tax Rates.
• AGM is not a mandate for an LLP. The AGM is already in a one-year gathering for shareholders of the company. Since there is no principle of stake in LLP, no AGM should be held.
• A board meeting is usually associated with a conference of the board of directors. The LLP includes no directors, runs the business rather than selected partners and is held responsible for compliance. Therefore, a board of partner meeting is suggested in the event of an LLP firm.
• There is no limit on the highest number of partners.

Understanding Form 11:

Form 11 is an annual return, to be filled by all LLPs irrespective of turnover during the entire year. Even when an LLP does not convey any service or business during the business year, a Form 11 filing is required. Apart from the required data about the name, address of LLP, details of partners / nominated partners, other information required to be submitted are: / / />

• Total promotion or contribution by / to LLP partners
• Features of notices received against penalties / compounding offenses committed during the financial year which should be e-filed at the MCA Gateway. A pre-fill option is available to reduce your efforts as well.

Documents to be submitted with Form 11

• Details of LLP and company in which partners/ designated partners (DP) are directors/ partners (It is mandatory to attach these details in case any partner/ DP is a partner in any LLP and director in any other company) 
• Any other information can be provided as an optional attachment to this e-Form

Due dates

• LLP Form 11 is the due date for annual return filing

  30/5/2020

• Due date of IT return: 31.07.2020 / 30.09.2020

  The last date for filing of income tax returns for LLP, which does not require tax audit on July 31, 2020, and if the tax audit is required due to the date of IT return for LLP, will be September 30, 2020 .

• LLP Form 8 due date - 30.10.2020
• Late fees for LLP 8 and LLP 11 filing

  On noticeable delay in filing Form 8 and 11 of LLP, a fine of Rs. 100 per day is payable from the due date of filing the return till the actual return is filed.