Annual Filings for Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) must complete periodic filings to remain compliant and avoid substantial penalties under the law. Although LLPs are subject to fewer annual compliance requirements compared to private limited companies, the penalties for non-compliance are significantly higher. While a private limited company may face penalties of up to INR 1 lakh, an LLP can be penalized up to INR 5 lakh for similar defaults.

LLP Compliances

An LLP is a separate legal entity. Therefore, the designated partners are responsible for maintaining proper books of accounts and ensuring that annual returns are filed with the Ministry of Corporate Affairs (MCA) every year.

LLPs are not required to undergo a statutory audit unless their annual turnover exceeds Rs. 40 lakhs or their total contribution is more than Rs. 25 lakhs. If both limits are within the prescribed threshold, audit of accounts is not mandatory, which simplifies the annual compliance process.

Every LLP must file its Statement of Account & Solvency within thirty (30) days from the end of six (6) months of the financial year, and the Annual Return must be filed within sixty (60) days from the end of the financial year.

Unlike companies, LLPs are required to follow a mandatory financial year from 1st April to 31st March. Accordingly, the Statement of Account & Solvency must be filed on or before 30th October each year, and the Annual Return is due by 30th May annually. These filings are compulsory even if the LLP has not carried out any business activities during the relevant financial year.

Statement of Accounts and Solvency

Every registered LLP is required to maintain proper books of accounts and report details relating to profits and other financial information by filing Form 8 each year. This form must be duly signed by the designated partners and certified by a practising Chartered Accountant, Company Secretary, or Cost Accountant. If the Statement of Accounts & Solvency is not filed within the prescribed time, a penalty of Rs. 100 per day is levied. The due date for filing Form 8 is 30th October of every financial year.

Filing of Annual Return

LLPs must file their Annual Return in Form 11. This form provides an overview of the LLP’s management details, including the number of partners and their particulars. Form 11 is required to be filed on or before 30th May each year.

Income Tax Filing and Audit Requirements

As mentioned earlier, LLPs with an annual turnover exceeding Rs. 40 lakh or a contribution exceeding Rs. 25 lakh are required to have their accounts audited by a practising Chartered Accountant under the LLP Act, 2008. For such LLPs, the due date for filing the income tax return is 30th September.

Note: The tax audit threshold of Rs. 1 crore has been enhanced to Rs. 5 crore from Assessment Year 2021–22 (Financial Year 2020–21), provided cash receipts do not exceed 5% of total turnover or gross receipts and cash payments do not exceed 5% of total payments, as per the Income Tax Act, 1961.

For LLPs not liable to tax audit, the due date for filing the income tax return is 31st July. LLPs involved in international transactions with associated enterprises or specified domestic transactions are required to file Form 3CEB, which must be certified by a practising Chartered Accountant. Such LLPs can file their income tax return by 30th November.

LLPs are required to file their income tax return using Form ITR-5. This return can be submitted online through the income tax portal using the digital signature of the designated partner.

Disclaimer: The content on this website is for informational purposes only and does not constitute legal, financial, or professional advice. Please consult qualified experts before acting on any information. K M GATECHA & CO LLP accepts no liability for errors, omissions, or outcomes from the use of this content. This site is not an advertisement or solicitation.