LIMITED LIABILITY PARTNERSHIP ANNUAL FILLING

LIMITED LIABILITY PARTNERSHIP ANNUAL FILLING

INTRODUCTION

Limited Liability Partnership (LLP) is a body corporate and a separate legal entity incorporated with the combined benefits of Company and partnership. Every LLP incorporated needs to file certain annual information in the form of Annual Return, Statement of Account and Insolvency, Income tax return etc. with the concern government departments for their records and to cross check the tax cascade. It is important to file the correct and concrete information, statements and documents with the government departments otherwise filing of incorrect or misleading information may attract penalty and fine not only on LLP but also on the Designated Partner of the LLP. Therefore, one should ensure to provide and file the return with correct details to the government. Before proceeding for annual filling of LLP, one need to know the exact Legal provision, documents to filled and the manner of filling of these annual documents with the concern government department i.e. ROC and Income Tax Authority.

Type of filing of documents has been presented below in the diagrammatic form:

1.    LEGAL PROVISION FOR ROC ANNUAL FILING OF LLP

Legal provision under the Limited Liability Partnership Act, 2008 and amendment there under from time to time has been divided into two parts:

A.   LLP FINANCIAL STATEMENT

Section 34 of the Limited Liability Partnership Act, 2008 states that every LLP shall maintain  proper books of accounts relating to its affair for each year of its existence in cash/ accrual basis and according to double entry of accounting. On the basis of this books, Every LLP shall prepare its annual accounts in the form of Statement of Account and Solvency within  a period of 6 months from the closure of financial year  via Form 8 of LLP. This statement shall be signed by the Designated Partners and filled within 30 days of expiry of 6 months in which the same were to be prepared [Rule 24].

Here the term Financial year means a period starting from 1^st April of the year till 31^st March of the following year.

However, financial year for a newly incorporated company is:

i)              In case incorporated before 30^th September, then the 31^st March of the following  year

ii)             In case incorporated after 30^th September, then the 31^st March of the next following  year

For example LLP incorporated on 31.10.2017, its financial year shall close on 31.03.2019, whereas LLP incorporated on 30.09.2017, its financial year shall close on 31.03.2018.

Books of Account shall contain:

i)              Particulars of all sum of money received and spent by LLP

ii)             Record of assets and liabilities of LLP

iii)            Statement of cost of goods purchased, inventories, work-in-progress, finished goods and cost of goods sold

iv)           Any other particulars which the partners may decide

Penalty for non compliance of Section 34

Failing to comply with the provision of the Act shall be punishable with fine : 

• on LLP: Rs,. 25,000/- but may extend upto Rs. 5,00,000/-
• on every Designated Partner: Rs. 10,000/- but may extend upto Rs. 1,00,000/-

DELAY IN FILLING ANNUAL FORMS WITH ROC

It is pertinent to note down here that it is vital for the LLP to file the Form 8 after considering the abovementioned information and documents within a period of 6 months from the date of ending of Financial Year, otherwise it would be required to pay fine of Rs. 100/- per day as penalty. To avoid such penalty on non-filling, it is advised to file the returns on or before due dates.

B.   LLP ANNUAL RETURN

Section 35 of the Limited Liability Partnership Act, 2008 states that every LLP shall file annual return within 60 days of closure of the financial year via Form 11 of LLP.  The date for filing annual return is on or before 30^th May.

In case the turnover of LLP is upto Rs. 5 Crore or contribution upto Rs. 50 lakhs, then Annual Return would require to be filed with a certificate from Designated Partner that the annual return contains true and correct information.

In all other cases, annual return along with certificate from Company Secretary in whole time practice to the effect that he has verified the books and records of LLP and found them to be true and correct.

Annual Return shall contain details such as:

i)              Name and LLPIN of LLP

ii)             Address and Branch details, if any.

iii)            Closure of financial year

iv)           Business classification and principal business activity

v)            Details of designated partners and their interest

vi)           Compounding of offences

Penalty for non compliance of Section 35

Failing to comply with the provision of the Act shall be punishable with fine :

• on LLP: Rs,. 25,000/- but may extend upto Rs. 5,00,000/-
• on every Designated Partner: Rs. 10,000/- but may extend upto Rs. 1,00,000/-

DELAY IN FILLING ANNUAL FORMS WITH ROC

It is pertinent to note down here that it is vital for the LLP to file the Form 11 after considering the above mentioned information and documents within a period of 60 days from the date of ending of Financial Year, otherwise it would be required to pay fine of Rs. 100/- per day as penalty. To avoid such penalty on non-filling, it is advised to file the returns on or before due dates.

2.    INCOME TAX RETURN

Every LLP shall file its income tax return for every financial year:

i)              Where tax audit is applicable: on or before expiry of 6 months from the closure of financial year i.e. 30^th September of that year;

ii)             Where tax audit is not applicable: on or before expiry of 4 months from the closure of financial year i.e. 31^st July of that year

Financial Year, for the purpose of Income Tax Act means, year ending on immediate coming 31^st day of March irrespective of the date of incorporation. Therefore, an LLP incorporated on 31.03.2018, its first financial year ends on 31.03.2018.

Tax audit is applicable on every person who carries on/provides:

• Business: sales, turnover and gross receipts is more than Rs. 1 Crores;
• Legal and professional services: gross receipts is more than Rs. 25 lakhs

and shall get their accounts audited by a Chartered Accountant in practice during that financial year.

In case return is filed after the due the entity will lose the right to carry forward any losses incurred to subsequent years.

 CONCLUSION

The Government has provided sufficient time to prepare and file mandatory returns. Therefore, it is requested to file all such return before time instead of waiting for the last moment. Further in case of any confusion or anyone require any further assistance in this respect please feel free to contact us. We would be happy to help you in complying the law.