LLP Compliance Guide (Accounting, Auditing & Mandatory Filings)
Limited Liability Partnerships (LLPs) offer a blend of company and partnership benefits, and like any registered business, LLPs must adhere to mandatory compliance norms to ensure their smooth operation and avoid legal penalties. This guide covers annual compliance requirements, accounting standards, and more, structured to suit growing businesses and startups for streamlined management.
Governing Acts and Rules
- LLPs in India are governed by the Limited Liability Partnership Act, 2008 and LLP Rules, 2009.
- Other relevant statutes include Income Tax Act, 1961 for tax-related filings and GST Act, 2017 if registered under GST.
Mandatory Compliance Requirements for LLPs
Annual Compliance Requirements
- LLPs must prepare financial records annually, including:
- Balance Sheet
- Profit and Loss Account
- These records ensure transparency for stakeholders and compliance with the MCA.
Financial Statements Preparation
- Form 11 is an annual return containing details of all partners and any structural changes.
- Filing Deadline: Must be submitted within 60 days from the close of the financial year (May 30 for an April-March fiscal year).
Filing of Annual Return (Form 11)
- Form 8 includes the LLP’s financial statement and a declaration of solvency.
- Filing Deadline: Must be filed within 30 days after six months from the financial year end (by October 30).
- YathraFin offers streamlined filing support to ensure your Form 8 submission is accurate and timely.
Statement of Account & Solvency (Form 8)
- LLPs must file ITR-5 with the Income Tax Department by July 31 if unaudited, or October 31 if an audit is required.
- LLPs with revenue above ₹1 crore or professional receipts over ₹50 lakhs must undergo a tax audit under Section 44AB of the Income Tax Act.
Income Tax Returns (ITR)
- LLPs registered under GST must file monthly or quarterly GST returns (e.g., GSTR-1, GSTR-3B). YathraFin handles GST filings and ITC claims, ensuring compliance.
Goods and Services Tax (GST) Compliance
Event-Based Compliance
- Any appointment or resignation of partners must be filed through Form 4 within 30 days of the change.
- YathraFin assists with partner change filings, ensuring regulatory compliance and smooth operational transitions.
Changes in Partners (Form 4)
- If there are modifications to the LLP Agreement, Form 3 must be submitted within 30 days of the change.
- Form 3 updates the MCA on changes in business operations, profit-sharing ratios, or responsibilities among partners.
Change of LLP Agreement (Form 3)
- Any change in partner contributions or LLP capital requires the filing of Form 3 and Form 4 to reflect the updated structure.
Contribution or Capital Changes
- LLPs must file Form 15 within 30 days of changing their registered office address.
Address Change (Form 15)
Financial Records to Maintain for LLPs
- LLPs must keep detailed books, including sales, purchases, assets, and liabilities. Records can be maintained at the registered office.
Books of Accounts
- While not mandatory for LLPs, keeping records of partner meetings can be beneficial for operational transparency.
Minute Books
- Maintain detailed records of each partner’s capital contributions and any subsequent changes.
Partner Contribution Register
- Payroll and employee records are required if the LLP has staff, for payroll tax and labor law compliance.
Employee Records (if applicable)
Audit Requirements for LLPs
- Annual Audit Requirement: LLPs with turnover over ₹40 lakh or capital over ₹25 lakh must undergo an annual statutory audit by a Chartered Accountant.
- Tax Audit Requirement: If turnover exceeds ₹1 crore or professional receipts exceed ₹50 lakh, a tax audit under Section 44AB is mandatory.
Timelines and Penalties
- Form 11: Must be filed by May 30 annually. Late filing incurs additional fees of ₹100 per day.
- Form 8: Must be filed by October 30. Delays lead to late fees of ₹100 per day.
- ITR: Due by July 31 (non-audited LLPs) or October 31 (audited LLPs). Late filing results in penalties.
Timely compliance helps avoid penalties and ensures LLPs maintain a reputable status. YathraFin offers comprehensive compliance tracking, ensuring that all deadlines are met with proactive support.
Benefits of Compliance with YathraFin’s Expertise
- Compliance Monitoring: YathraFin ensures every LLP deadline is met, avoiding costly penalties.
- Expert Guidance: Experienced professionals handle LLP compliance, minimizing legal and financial risks.
- Transparency for Partners: Adhering to compliance protocols provides clarity and confidence among partners.
FAQ
Frequently Asked Questions
These FAQs cover essential details like eligibility, required documents, process steps, and benefits. It helps clarify common queries about setup, compliance, costs, and timelines.
Yes, all LLPs must file annual returns and a statement of account & solvency, regardless of turnover.
Late filing attracts a penalty of ₹100 per day until compliance is met.
Yes, LLPs must maintain accurate books of accounts to reflect their financial position.
Statutory audit is required if turnover exceeds ₹40 lakh or capital contribution exceeds ₹25 lakh.
Form 8 must be filed by October 30 for the preceding financial year.
Yes, LLPs must deduct TDS for applicable expenses and file quarterly TDS returns.
Form 4 is used to file changes in the appointment, removal, or resignation of partners.
While meetings are not mandatory, they’re beneficial for internal decision-making and record-keeping.
Penalty varies, with a maximum fine of ₹10,000 under the Income Tax Act for delayed filings.
Only LLPs with taxable supply above ₹20 lakh (or ₹10 lakh in certain states) must register under GST.
Capital contributions are not taxable as income but are documented for compliance.
Yes, Form 15 must be filed within 30 days of a registered office address change.
YathraFin provides end-to-end compliance support, from filing to tracking deadlines.
Balance sheets, profit & loss accounts, and receipts of transactions should be maintained.
File Forms 3 and 4 to document any changes in capital or partner contributions.
Tax audit is required if turnover exceeds ₹1 crore or professional receipts exceed ₹50 lakh.
GST returns are filed monthly or quarterly, depending on turnover.
No, LLPs have partners instead of shareholders, as per the LLP Act.
Yes, YathraFin assists LLPs with monthly/quarterly GST filings.
YathraFin prepares and files all necessary forms for partner changes in compliance with MCA norms.
YathraFin provides tailored compliance solutions for LLPs, helping you stay ahead of statutory requirements with minimal effort.