ANNUAL COMPLIANCE OF LIMITED LIABILITY PARTNERSHIP (LLP)
For a Limited Liability Partnership (LLP), regular filing of returns is essential to uphold compliance standards and avoid heavy penalties for non-compliance. While LLPs enjoy a lighter annual compliance, burden compared to private limited companies, the fines for delays or defaults can still be substantial reaching up to ₹5 lakh.
Ensuring timely and accurate filings strengthens an LLP’s credibility, maintains its active legal status, and demonstrates financial transparency. This guide simplifies the key annual compliance requirements for LLPs in India and outlines the due dates, forms, and responsibilities of designated partners.
LLP ANNUAL COMPLIANCE OVERVIEW
Limited Liability Partnerships (LLPs) are distinct legal entities governed by the Limited Liability Partnership Act, 2008. As such, they must adhere to specific compliance obligations every year. The responsibility for ensuring compliance lies primarily with the Designated Partners.
The major annual compliance requirements include:
- Maintenance of proper books of accounts
- Filing of Annual Return (Form 11)
- Filing of Statement of Accounts & Solvency (Form 8)
- Filing of Income Tax Return (Form ITR-5)
- Tax Audit, if applicable
Meeting these obligations on time helps maintain good standing with regulatory authorities and prevents costly penalties.
Maintenance of Proper Books of Accounts
Every LLP must maintain accurate and up-to-date records of its financial transactions, profits, expenses, assets, and liabilities. Proper bookkeeping forms the foundation for filing annual statements and ensures financial accuracy and accountability.
Filing of Annual Return (Form 11)
All LLPs must file Form 11 annually with the Ministry of Corporate Affairs (MCA). This form provides key details such as:
- The number of partners and designated partners
- Capital contributions
- Partner details and changes during the year
Due Date: Within 60 days of the close of the financial year, i.e., by May 30 every year.
Penalty for Late Filing: A delay attracts a penalty of ₹100 per day from the due date until the return is filed.
Importance: Non-filing can restrict an LLP from closing or winding up its operations until all returns are duly submitted.
Filing of Statement of Accounts & Solvency (Form 8)
Form 8 reflects the LLP’s financial health, including assets, liabilities, and solvency status. It must be digitally signed by two designated partners and certified by a Chartered Accountant, Company Secretary, or Cost Accountant.
Due Date: Within 30 days from the end of six months after the close of the financial year generally by October 30.
Form 8 consists of two parts:
- Part A – Statement of Solvency: Declares whether the LLP is solvent.
- Part B – Statement of Accounts: Details income, expenditure, assets, and liabilities.
Penalty for Late Filing: ₹100 per day of delay.
Filing of Income Tax Return (Form ITR-5)
Every LLP must file its income tax return using Form ITR-5 under the Income Tax Act, 1961. Due Dates:
- July 31: If no tax audit is required
- September 30: If a tax audit is applicable
This form reports income, expenses, deductions, and tax liabilities for the financial year. Timely filing ensures compliance and prevents interest or late-filing penalties under Section 234F of the Income Tax Act.
AUDIT AND TAX FILING REQUIREMENTS
Under Section 34 of the LLP Act, 2008, and the Income Tax Act, 1961:
- Audit is mandatory if the annual turnover exceeds ₹40 lakh or the total contribution exceeds ₹25 lakh.
- From AY 2021–22 onward, a higher threshold of ₹5 crore applies for tax audits if cash transactions (receipts and payments) do not exceed 5% of total transactions.
Tax Audit Filing Due Date: September 30.
International Transactions: LLPs engaged in cross-border or specified domestic transactions must file Form 3CEB, certified by a Chartered Accountant, by November 30.
LLP ANNUAL FILING COMPLIANCE CALENDAR
| Form Type | Description | Due Date | Filed With |
| Form 11 | Annual Return | May 30 | Registrar of Companies |
| Form 8 | Statement of Accounts & Solvency | October 30 | Registrar of Companies |
| ITR-5 | Income Tax Return | July 31 (or Sept 30 if audited) | Income Tax Department |
| Audit | Tax Audit (if applicable) | September 30 | Income Tax Department |
BENEFITS OF TIMELY LLP ANNUAL COMPLIANCE
- Enhanced Credibility: Builds trust with banks, investors, and partners.
- Financial Transparency: Provides a clear record of financial performance.
- Active Legal Status: Keeps the LLP from being marked as defunct or defaulting.
- Ease of Conversion or Closure: Simplifies restructuring, merger, or closure procedures.
- Penalty Avoidance: Saves significant costs from daily late fees or legal issues.