Financial Year End Compliance for LLP
“Annual Declaration” means a declaration required to be lodged by a Limited Liability Partnership (LLP) under section 68 of LLP Act. Annual returns statement contains of the book of accounts accompanied by documents as required in the declaration. Given that the dates are getting closer, we have written this blog to guide you LLPs with the annual returns filing.
Conditions for Compulsory Auditing of Accounts
What is this? Well, LLPs, if records a turnover exceeding INR 40L or whose contribution exceeds INR 20L need to get their accounts audited.
How should it be done? LLPs are required to follow these procedures:
- Only a CA can be appointed as auditor
- Appointment should be made anytime before the end of the first financial year
- Remunerations or role played by partners in appointing or removing a partner is guided by the LLP Deed
Note: If LLP annual turnover is more than INR 5C or contribution is more than INR 50L, the annual return should be certified by a company secretary too.
Filing Annual Return – Form 11
What is this? Within 60 days of the end of financial year, LLPs registered till the 30th September 2017 are subject to file annual return statement with Registrar in Form 11. An LLP which fails to comply with annual returns filing will be fined of not less than INR 20K but which may extend to INR 5L. If your LLP is registered on or after the 1st October 2017 then you do not require to file LLP Annual Return in the year 2018.
How should it be done? Annual return reporting in form 11 accompanied by a certificate from a CS in practice should be filed, only if LLP turnover exceeds INR 5C or contribution exceeds INR 50L. In all other cases, partners can file the form themselves.
When should it be done? By 30th May, 2018
Filing of Statement of Account and solvency – Form 8
What is this? LLPs are required to file form 8 with the registrar, within 30 days from the end of six months of the financial year. Form 8 or Annual Statements for the year 2018 is applicable to those LLP which is registered until the 30th September, 2017.
How should it be done? Annual return reporting in form 8 accompanied by a certificate from a CS/ CA in practice should be filed.
When should it be done? By 30th October, 2018
Note: Digital Signatures of any 2 Designated Partners would be required for filing both forms purposes.
Penalty for non-filing of annual returns:
- Delay in Form 8 filing – INR 100 per day till it is filed
- Delay in Form 11 filing – INR 100 per day
Penalty for the false statement:
- Imprisonment up to 2 years
- Fine up to INR 5L, not less than INR 1L
- The registrar may summon partners to appear in the court
Q1. Do LLPs that did no business in the previous financial year have to file annual returns?
Ans: Yes, file Nil-Returns.
Q2. Can an LLP be closed without completing annual returns?
Ans: No, to wind up an LLP you need to file the pending returns accompanied by the accumulated fine.
Q3. What are the documents required?
- Incorporation Certificate
- Books of Account
- Minute Book
- Details of Change in Partners
- Supplementary LLP Agreement (optional)
- DSC of two directors
- Certificate by Company Secretary (optional)