What is Limited Liability Partnership(LLP)
Contents
Limited Liability Partnership is a globally recognized business entity. It has been introduced in India through the procedure of Limited liability partnership Act. Moreover, comprises of the advantages of both companies as well as the partnership into a single name LLP. The regulations of LLP have been set by the Registrar of the companies i.e Ministry of Corporate Affairs. This kind of legal entity has a perpetual succession separate from its partners. In this article, we will discuss the LLP Compliances. You can get the following benefits from the registration of LLP:
- It costs low in the formation process and is easy to form
- there is no requirement of minimum contribution
- there is no requirement of compulsory Audit
- the minimum requirement of partners is 2 and it can have more partners also
- It has limited liability to the extent of his/her contribution to the LLP
- Being a juristic Legal Personality as per the companies act LLP can sue and be sued by other legal entity.
- The partners shall not be the one to be sued for dues against the LLP.
- There is less restriction imposed on LLP by the government as compared to others.
- Besides easy startup, the wind-up system is also very easy in LLP as compare to that of a private limited company.
- Anyone can be a partner whether a corporate body or an individual.
LLP Compliances as per MCA
There are certain LLP Compliances set by the Ministry of Corporate Affairs (MCA) which regulates LLP after incorporation. These are given below:
- Preparation and file LLP Agreement with MCA: Within 30 days after incorporation, LLP must be filed with the Ministry of Corporate Affairs.
- PAN and TAN Application: The PAN/TAN Department shall send PAN/TAN of the LLP to the registered office address of the LLP. Online PAN registration and TAN Registration are very relevant for the LLP.
- Opening Bank Account: As it is considered as a corporate entity so it has to open a Bank account with the following documents:-
- LLP agreement
- PAN of the LLP
- LLP Registration certificate issued by ROC
- Resolution to open a bank account
- List of partners
- PAN and address proof of partners.
4. Appointment of Auditor: there is no requirement of the auditor in LLP. If turnover of the LLP exceeds Rs. 40,00,000/ capital contribution exceeds Rs. 2500000, then it is mandatory to appoint an auditor.
5. Filing LLP Annual return: the table given below will describe the duration for Filing LLP Annual Return:
| Form | Documents | Days and Dates |
|---|---|---|
| FORM 11 | Annual return | within 60 days from the end financial year (30th May) |
| FORM 8 | Statement of Account and Solvency | within 30 days from the end of 6 months from the end of a financial year (30 October) |
6. Other event based form: the date for filing these forms is 30 days from the date of the event.
7. Non-compliance results in a penalty: make sure that the form of LLP Annual Return must be filed on time otherwise penalty of Rs. 100 per day shall be imposed for the non- compliance.
8. Income tax return filing: It is important to file an income tax return for all LLP Registered in India irrespective of profits or revenue. Therefore, even a dormant LLP without undertaken any transaction shall file ITR.
Maintenance of Documents
At the time of incorporation of LLP, all the documents shall be maintained such as
- Names of partners with changes occurred
- Proof of fee payment
- Statement of account and solvency and the annual return filed by LLP with the registrar
For the inspection purpose of the concerned authorities, these documents should be kept handy as records.
For further more details regarding LLP Agreements, Company registration, GST Returns you can visit our website: Legal Raata
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