Introduction:
In 2008, India adopted the concept of Limited Liability Partnerships (LLP). An LLP combines the qualities of a partnership and a corporation. An LLP is governed by the Limited Liability Partnership Act, 2008. For an LLP to be formed, a minimum of Two Partners is required. However, there is no upper cap to this limit, there can be unlimited partners in an LLP.
At present, the government is being more vigilant about the compliances for Companies. This opens up an opportunity for business multitude to opt for LLP, quoting its comparatively simplified compliances. Nonetheless, post incorporating LLP, utmost vigilance is expected because the penalty for the delay in its annual filings is charged on daily basis. An LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs.
ROC FILINGS OF LLP
Every LLP registered under the act have to compulsorily file annual accounts and annual accounts with ROC, every year within the due date.
TYPE OF FORMS AND DUE DATE OF FILING
| Sr. No. | Type of Form | Applicability | Due date of Annual Filing | List of Documents to be submitted |
| 1. | Form 11 | LLP Registered up to 30th September | 30th May of following Financial Year | Details of LLP and / or Company in which Partner / Designated Partner is a Director / Partner |
| LLPs Registered on or after 1st October | Optional to either before upcoming 30th May or before 30th May of following Financial Year. | |||
| 2. | Form 8 | LLPs Registered up to 30th September | 30th October of following Financial year | Disclosure under MSME & Statement of Accounts |
| LLPs Registered on or after 1st October | Optional to either before upcoming 30th October or before 30th October of following Financial Year. |
Note 1: LLP’s registered up to 30th September of any year- have to mandatorily close their financial year on coming 31st March.
Note 2: LLP’s registered on or after 1st October, have an option either to consider the first financial year till the coming 31st march or 31st march of the following financial year.
Documents Required
1. Limited Liability Partnership Agreement along with the supplementary deed if any
2. Certificate of Incorporation
3. Financial Statements duly signed by the Designated Partners
4. DSC of all the Designated Partners
Form 11 For LLPs
Form 11 is an Annual Return of the LLPs, which has details about the nature of business, details of partners and any changes therein.
Contents of Form 11:
- Numbers of partners;
- Total contribution received by all partners;
- Details of partners, details of body corporate as partners;
- Summary of partners.
Every LLP shall file Annual Return within 60 (sixty) days from the closure of the financial year along with prescribed fees.
Due date of filing Form 11 is 30th May of the following year.
Note: If LLP fails to file form 11 within prescribed time, the designated partners shall be liable to be punishable with fine which shall not be less than Rs. 25,000/- but which extend to Rs. 5,00,000/-
LLP Form 8
It is a declaration to be given by all the designated partners of an LLP in relation to financial status of the LLP and details of transactions done during the reporting period. LLP firms are required to prepare Statement of Accounts and Solvency which is to be filed using Form 8, by all the designated partners within 30 days along with the prescribed fees. This shall be done within 30days from the end of six months from the end of financial year to which statement of accounts relate.
Contents of Form 8:
Part A: Statement of solvency
Part B: Statement of Accounts, statement of Income and Expenditure
Attachments: Disclosure under Micro, Small and Medium Enterprises (MSME) Development Act, 2006.
Form 8 is required to be digitally signed by 2 Designated Partners and certified by CA (in whole time practice) / CS (in whole time practice) / Cost Accountant (in whole time practice).
As per the LLP Act, 2008 and LLP Rules 2009, every LLP shall file Statement of accounts and solvency under e-form 8 with prescribed fee within a period of 30 (thirty) days from the end of 6 (Six) months of the financial year to which such statement relates i.e. 30th October, every year.
LLP Tax Audit Applicability
The turnover and contribution of the partner in LLP decides the criteria of audit for that LLP. An LLP with a turnover more than 40 lakhs or capital contribution of partners more than 25 lakhs, is required to get its books audited by a practicing Chartered Accountant.
In order to avail the exemption from audit, the LLPs accounts filed with the ROC must contain a statement by the Partners to the effect that the Partners acknowledge their responsibilities for complying with the requirements with respect to accounting and preparation of financial statements.
Penalty For Non-Filing Of Annual Accounts With Roc
Late Filing of Form 8 and Form 11 attracts a late fee of 100/- per day each per form immediately after the due date till the date the form is actually filed.
In view of the above, one can understand the huge of penalty that can be imposed if there is a substantial delay in filing the annual forms. One should note that these are online forms and cannot be filed without making the fee payment, in any case.
Conclusion:
Partners of LLP’s need to understand that winding up of the business is not the solution to escape the imposition of penalties. Instead, they must comply with all the pending filings and update the ROC with the status of affairs, be it for continuing the business or discontinuance.
In view of the above it is highly essential to get your LLP incorporated through experienced and responsible professionals who are apt to guide you well in complying with the various applicable compliances.