INTRODUCTION
Limited Liability Partnership (LLP) Annual Filing is a mandatory compliance that is necessary for all LLPs registered in India. Even if the concerned LLP has no business activity, it must file its returns with the Ministry of Corporate Affairs (MCA). If the LLPs file timely returns with the MCA, they can avoid hefty penalties, and it keeps the LLP in sound legal standing.
WHAT IS LLP ANNUAL FILING
LLP Annual Filing can be defined as yearly process of filing where an LLP submits its relevant financial as well as operational details to the Ministry of Corporate Affairs. There are 2 types of main forms: Form 11 (Annual Return) and Form 8 (Statement of Accounts & Solvency). Filing these forms are a legal requirement of whether the LLP has conducted any business in a single year or not. Such filings are necessary to maintain transparency, regulatory compliance and avoid hefty and unnecessary penalties on the LLPs.
FORMS REQUIRED FOR LLP ANNUAL FILING
Filing annual returns is not just a legal formality but a mandate. To avoid unnecessary legal actions and heavy penalties, it is important for the LLPs to stay compliant with the MCA, Income Tax Department, etc. Some of the forms to be filled by the LLPs are:
- FORM 11- ANNUAL RETURN
Form 11 is the annual return that every LLP registered in India must file every year with the MCA under the provisions of the Limited Liability Partnership Act, 2008. This form contains details about the LLP, including details of the partners/designated partners, total capital contribution received, and any changes in management during the financial year. This form must be filed electronically through the MCA website, regardless of whether the LLP has conducted any business over the year or not. The due date for filing Form 11 is 30th May of every year for the financial year ending on 31st March. A penalty of Rs. 100 per day is levied for late filing, with no maximum penalty, making timely submission of the form crucial.
- FORM 8- STATEMENT OF ACCOUNT AND SOLVENCY
Form 8 is about an LLPs financial position and strength. This form contains a declaration of the LLPs solvency, along with the details of the statement of assets and liabilities and the statement of income and expenditure.
The due date for filing Form 8 is 30th October of every year for the financial year ending on 31st March. Non-filing of this form attracts a penalty of Rs. 100 per day, with no upper limit which may also lead to legal consequences for the partners/designated partners. The form must be digitally signed by at least two designated partners and certified by a chartered accountant, cost accountant or company secretary.
- INCOME TAX RETURN- ITR-5
LLPs also need to fulfil their tax obligations. The form contains comprehensive details including income from business or profession, capital gains, etc. If a tax audit is applicable under section 44AB of the Income Tax Act, 1961, the audit report must be filed before submitting ITR-5. The due date for filing is 31st July if audit is not applicable and 31st October if audit is applicable. ITR-5 must be filed online through the Income Tax e-filing system and verified through an Electronic Verification Code (EVC).
STEP-BY-STEP PROCESS OF LLP ANNUAL RETURN FILING
Step1: Maintain Books of Accounts: Make sure that all financial transactions are properly and accurately recorded and books of accounts are updated.
Step 2: File Form 11 (Annual Return): Submit details of all LLP partners and contributions to the MCA by 30th May.
Step 3: File Form 8 (Statement of Account & Solvency): File financial statements as well as solvency declaration with the MCA by 30th October.
Step 4: File Income Tax Return (ITR-5): Submit ITR-5 with the Income Tax Department on the Income Tax e-filing system by 31st July or 31st October, depending on audit requirement.
Step 5: Get Audit done (If Applicable): Conduct a statutory audit if turnover exceeds Rs. 40 lakhs or contribution exceeds Rs. 25 lakhs.
CONCLUSION
LLP Annual Return filing is a mandatory and legal compliance process for every LLP registered in India. This ensures transparency, financial accountability and regulatory compliance. By smoothly adhering to these compliances, LLPs do not only stay compliant but also pave way for proper business operations, solvency.
FREQUENTLY ASKED QUESTIONS (FAQs)
- What are the annual compliance requirements for an LLP in India?
An LLP must fulfil the following annual compliances:
- Form 11- Annual Return (Due by 30th May)
- Form 8- Statement of Account and Solvency (Due by 30th October)
- Income Tax Return (ITR-5)- Due by 31st July
- DIR-3 KYC- Annual KYC for designated partners
- Is an LLP required to file annual forms even if it has no business activity?
Yes. Even non-operational LLPs must file the above-mentioned form annually to remain compliant and avoid penalties.
- What are the penalties for non-compliance of LLP annual returns?
The penalty for non-filing of Form 11 or Form 8 is Rs. 100 per day, per form, with no upper limit, until the form is filled.
- Is it mandatory for LLPs to get their accounts audited?
Audit is mandatory only if:
- Turnover exceeds Rs. 40 lakhs, or
- Capital contribution exceeds Rs. 25 lakhs.
Otherwise no audit is mandatory.
