Annual Compliance for LLP: A Complete Guide

A Limited Liability Partnership (LLP) is a popular business structure that combines the flexibility of a partnership with the limited liability protection of a company. However, like any other registered entity, an LLP must comply with various statutory requirements to maintain its legal status and avoid penalties. Annual compliance for LLP is a crucial aspect that ensures transparency, accountability, and good corporate governance. This article provides a detailed overview of the mandatory annual compliance requirements for LLPs in India.

Why is Annual Compliance for LLP Important?

Annual compliance for LLP is not just a legal obligation but also a means to ensure smooth business operations. Non-compliance can lead to heavy penalties, disqualification of partners, and even the striking off of the LLP from the Registrar of Companies (RoC). Proper compliance helps in maintaining good standing with regulatory authorities, securing loans, and building trust among stakeholders.

Key Annual Compliance Requirements for LLP

1. Filing of Annual Return (Form 11)

Every LLP must file an Annual Return with the Ministry of Corporate Affairs (MCA) using Form 11. This form contains details such as:

• The total number of partners
• Contribution received from partners
• Summary of partners’ changes (if any)
• Details of designated partners

Due Date: Form 11 must be filed within 60 days from the end of the financial year, i.e., by May 30th every year.

2. Filing of Statement of Accounts & Solvency (Form 8)

LLPs are required to file Form 8, which includes:

• A statement of accounts (Balance Sheet and Profit & Loss Account)
• A declaration of solvency signed by the designated partners

Due Date: Form 8 must be filed within 30 days from the end of six months of the financial year, i.e., by October 30th every year.

3. Income Tax Return (ITR) Filing

LLPs must file their Income Tax Returns (ITR) under the Income Tax Act, 1961. The applicable forms are:

• ITR-5 (for LLPs with normal income)
• ITR-3 (if the LLP is taxed as a firm)

Due Date:

• July 31st (if no audit is required)
• September 30th (if audit is required)

4. Audit Requirements for LLP

An LLP must get its accounts audited if:

• Its annual turnover exceeds ₹40 lakhs, or
• Its capital contribution exceeds ₹25 lakhs

A practicing Chartered Accountant (CA) must conduct the audit and submit the report along with Form 8.

5. Maintenance of Statutory Registers

LLPs must maintain certain statutory registers, including:

• Register of Partners
• Register of Loans & Guarantees
• Register of Changes in Partners

These registers must be kept at the LLP’s registered office and updated regularly.

6. Compliance under GST (if applicable)

If the LLP is registered under GST, it must file:

• GSTR-1 (Monthly/Quarterly returns for outward supplies)
• GSTR-3B (Monthly summary return)
• Annual GST Return (GSTR-9)

Due Date:

• GSTR-1 – 11th of the next month (monthly) / 13th of the next quarter (quarterly)
• GSTR-3B – 20th of the next month
• GSTR-9 – December 31st of the following financial year

7. TDS Compliance (if applicable)

If the LLP deducts TDS (Tax Deducted at Source) on payments like salaries, rent, or professional fees, it must:

• File Quarterly TDS Returns (Form 24Q, 26Q, 27Q)
• Issue TDS certificates to deductees
• Submit Form 26AS for annual reconciliation

Due Dates for TDS Returns:

• Q1 (April-June) – July 31st
• Q2 (July-Sept) – October 31st
• Q3 (Oct-Dec) – January 31st
• Q4 (Jan-Mar) – May 31st

8. LLP Agreement Amendments (if any)

If there are changes in the LLP Agreement (such as admission/exit of partners, change in profit-sharing ratio, or business objectives), the LLP must file Form 3 with the RoC within 30 days of the change.

9. DIN KYC for Designated Partners

Every Designated Partner must file DIR-3 KYC annually to update their DIN (Director Identification Number) details. Non-compliance can lead to DIN deactivation.

Due Date: September 30th every year.

10. Compliance under Other Laws (if applicable)

Depending on the nature of the business, additional compliances may apply, such as:

• FEMA (Foreign Exchange Management Act) – If the LLP has foreign investments
• Labour Laws – PF, ESI, and Shops & Establishment Act filings
• Professional Tax – If applicable in the respective state

Penalties for Non-Compliance

Failure to meet annual compliance for LLP can result in:

• Late filing fees (₹100 per day for Form 11 & Form 8)
• Additional penalties under the LLP Act
• Disqualification of designated partners
• Striking off the LLP from the RoC register

Conclusion

Annual compliance for LLP is a mandatory requirement that ensures legal and financial discipline. By adhering to the due dates and maintaining proper records, LLPs can avoid penalties and operate smoothly. It is advisable to consult a Chartered Accountant (CA) or Company Secretary (CS) to ensure all compliance requirements are met accurately and on time.

Staying compliant not only safeguards the LLP’s legal status but also enhances its credibility among investors, banks, and clients. Therefore, every LLP must prioritize annual compliance to ensure long-term business success.