MANDATORY ANNUAL COMPLIANCES FOR YOUR LLP

Congratulations on forming your LLP and all the best for your venture! This is a list of compliances which you need to adhere to post forming your LLP.

Note: Each point mentioned below is a huge topic within itself. We have tried to briefly cover all points related to the below sub-topics to give you a fair idea about each sub-topic.

1) Book keeping: - Every LLP has to maintain Books of Accounts showing details of its Income and Expenditure during the year. Maintenance of books of accounts has been mandated by the Income Tax Act, 1961 and the Limited Liability Partnership Act, 2008. Books like Ledgers, Cash Book, Bank Book, Bank Reconciliation Statement, Stock Register etc. have to be maintained.

2) TDS Returns: - A LLP has to file TDS Returns Quarterly and Pay TDS Monthly. Two Separate Returns for Salary and Non-Salary TDS have to be filed every quarter. Every LLP has to pay TDS by the 7^th of the next month, except for the month of March where TDS has to be paid by the 30^th of April. For example, TDS due for the month of April has to be paid by 7^th of May. If you do not pay TDS on time, Interest is payable @ 1.5% Per Month (i.e. 18% P.A.) on Late Payment of TDS. The due dates for filing TDS Returns are as follows: -                        

The Penalty for Late Filing of TDS Returns is Rs 200/- per day subject to a maximum of TDS payable for that quarter.

3) VAT and Service Tax Payment and Returns: - If your LLP is selling goods then in all probability you will be having a VAT Registration. The Due dates for Payment and return filing of VAT are different from State to state. The Due dates of payment of Service tax are as follows: -

Interest @ 12-24% P.A. is payable for late payment of service tax. The due dates for filing Service Tax Returns are as follows: -                  

Late filing fees for Service Tax returns are payable as follows: -

4) ROC Compliance in Form 11 and Form 8: - Every LLP has to file Form 11 and Form 8 with the ROC yearly. Form 11 contains the details of the Partners/Designated Partners of the LLP and the contribution received from the Partners/Designated Partners. Form 8 contains the details of the Income, Expenditure, Assets and Liabilities of the LLP. The Due dates to file Form 11 and Form 8 are as follows: -

For example if a LLP has been formed on the 1^st of June 2016 then it has to file Form 11 by 30^th May, 2017 and Form 8 by 30^th October, 2017.

It is really important to note that Non-filing/Late Filing of Form 11 and Form 8 of the LLP can lead to enormous penalties. A Penalty/Late filing fee of Rs 100/- per day is payable for late filing of BOTH these forms. There is NO MAXIMUM CEILING to the late filing fees. For instance, the maximum fees for Late filing of Service Tax returns is Rs 20000/- but for Form 11 and Form 8 there is NO such ceiling. The late filing fees can run into thousands and sometimes even lacs. One has to be really careful and should make sure that they are filing Form 11 and Form 8 on time.

5) Audit under the LLP Act, 2008 and the Income Tax Act, 1961: - A LLP is NOT required to get its books audited every year. Only if the capital/contribution of the LLP exceeds Rs 25 lacs or if the Turnover of the LLP exceeds Rs 40 lacs, then an Audit has to be conducted under the provisions of the LLP Act, 2008. Additionally, if the Turnover of the LLP exceeds Rs 2 crores then an Audit has to be conducted as per the provisions of the Income Tax Act, 1961 as well.

6) Filing of Income Tax Returns: - The last and final annual compliance of a LLP is filing of Income Tax Returns. The due dates for filing Income Tax Returns are as follows: -