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Annual Compliance of LLP

Know the minimum annual compliances to be followed by a Limited Liability Partnership Firm

    Limited Liability Partnership

    LLP is a body corporate having separate legal entity from its partners. The annual compliances applicable for an LLP are lesser when company with any company. However, the fines and penalties are huge.

    Due Date Form Number Form Name
    30th May
    Form 11
    Annual Return
    30th October
    Form 8
    Statement of Solvency

    Annual Return

    The Annual Return must be filed within 60 days from the end of the Financial Year. A statement of solvency has to be filed within 30 days from the end of 6 months from the closure of the Financial Year. The Annual Return (Form 11) contains details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners. The Statement of Solvency (Form 8) contains a declaration on the state of solvency of the LLP by the designated partners and also information related to statement of assets and liabilities and statement of income and expenditure of the LLP.

    Tax Audit

    LLPs have to get their accounts audited by a practicing Chartered Accountant if its annual turnover, in any financial year exceeds Rs.40 lakhs or its contribution exceeds Rs.25 lakhs.

    Note: With effect from AY 2021-22 (FY 2020-21), if LLP’s cash receipts are limited to 5% of the gross receipts or turnover, and LLP’s cash payments are limited to 5% of the aggregate payments, the threshold limit for being liable to Tax Audit is having a turnover or gross receipts of Rs.5 crore or more in the previous year.

    Income tax Return

    An LLP has to electronically file its Income tax Return using ITR 5 at the income tax website. Such form needs to be digitally signed by the authorized partner. The LLPs who are not required to get their accounts audited under the Income Tax Act have to file their ITR on or before 31st July. However, those LLPs who are liable for tax audit have to file their ITR on or before 30th September.For LLPs who have entered intoany international transactions with associated enterprises or have undertaken specified Domestic Transaction are required to furnish Form 3CEB.For such LLPs, the deadline for filing income tax return is 30th November.

    Books of Accounts

    Unlike companies, LLPs have an option to choose between cash or accrual system of accounting. However, the books of account must be maintained, irrespective of the turnover, since the date of registration. The books must be kept at the registered office of the company and they must contain all the information relating to assets and liabilities, inventories, money received and expended, and so on.