A Limited Liability Partnership is a popular way to set up a business in India. This is because it is flexible and the people who own it have limited liability protection. Every year, Limited Liability Partnership has to follow rules. This is because it is registered under the Limited Liability Partnership Act of 2008.
Many Limited Liability Partnerships mistakenly believe that if there is no turnover or business activity they can ignore doing what they are supposed to do. This is an idea and it often results in the Limited Liability Partnership having to pay a lot of money as penalties. The fees for being late are calculated every day. There is no limit, to how much the Limited Liability Partnership has to pay. So it is very important for every Limited Liability Partnership and its designated partners to follow rules.
This blog is about Limited Liability Partnership compliance. It gives us a Limited Liability Partnership annual compliance checklist. We get to know about the forms that Limited Liability Partnerships need to fill. The blog also tells us about the due dates. What happens if Limited Liability Partnerships do not file forms on time. The goal is to help Limited Liability Partnerships to follow the laws and avoid paying penalties.
Overview of LLP Annual Compliance
Annual compliance for Limited Liability Partnerships is something that has to be done every year. We need to file some papers with the Ministry of Corporate Affairs and the Income Tax Department. This is important because it helps people see what the Limited Liability Partnership is doing and how it is being managed.
Limited Liability Partnerships are not required to have meetings every year like Annual General Meetings or meetings with the people, in charge which are called Board Meetings. However, Limited Liability Partnerships must:
- Maintain books of accounts
- Prepare annual financial statements
- File annual forms within prescribed timelines
- File income tax returns every year
An Limited Liability Partnership or LLP is something that needs to follow the rules every year even if it does not have any turnover or if it is not doing any business.
Mandatory Annual Compliance Forms for LLP
Limited Liability Partnerships are required to file the following forms every year:
Form 11 – Annual Return of LLP
Form 11 is something that Limited Liability Partnerships have to fill out every year. This Form 11 gives information, about the partners of the Limited Liability Partnership and the designated partners of the Limited Liability Partnership at the end of the year. It has things like:
• Total number of partners
• Details of designated partners
• Changes in partnership, if any
• Contribution details
Every Limited Liability Partnership needs to fill out this form. They have to do it every year even if nothing has changed with the partners. If you do not file Form 11 on time Limited Liability Partnership will have to pay a lot of money in fees. Limited Liability Partnership should make sure to file Form 11 to avoid these costs.
Form 8 -Statement of Account & Solvency
Form 8 has the information of the Limited Liability Partnership and a declaration, about whether the Limited Liability Partnership is solvent or not. It includes:
• Statement of assets and liabilities
• Statement of income and expenditure
• Declaration of solvency by designated partners
The Form 8 has to be signed by at least two of the designated partners. It also needs to be certified by a practicing professional if that is required.
Income Tax Return (ITR-5)
Every Limited Liability Partnership is required to file its income tax return using the ITR-5 form no what the income or loss is. This means that even Limited Liability Partnerships, with no income all must still file their tax returns.
Audit requirements depend on various factors. The factors which affect audit requirements include:
- the type of business
- the size of the company
- the industry the company is in
- Turnover exceeding ₹40 lakh, or
- Partner contribution exceeding ₹25 lakh
LLP Annual Compliance Due Dates
It is really important to do things on time so you do not have to pay penalties Below are the due dates that Limited Liability Partnerships have to follow:
| Compliance | Forms | Due Date |
| Annual Return Filing | Form 11 | 30th May every year |
| Statement of Account & Solvency | Form 8 | 30th October every year |
| Income Tax Return (Non-Audit Case) | ITR-5 | 31st July |
| Income Tax Return (Audit Case) | ITR-5 | 31st October |
| Tax Audit Report (if applicable) | Form 3CA / 3CB | 30th September |
Penalties for Non-Compliance in LLP
Limited Liability Partnerships have a lot of rules to follow. One big thing to think about with Limited Liability Partnerships is how bad the penalties can be. The thing is, Limited Liability Partnerships are different from companies. When it comes to Limited Liability Partnerships there is no limit, to how much you have to pay if you file things late.
Penalty for Late Filing of Form 11
• ₹100 per day of delay
• No maximum limit
Penalty for Late Filing of Form 8
• ₹100 per day of delay
• No maximum limit
Penalties Under LLP Act, 2008
• Minimum fine: ₹25,000
• Maximum fine: ₹5,00,000 for LLP
• The people who’re in charge that is the designated partners may have to pay a fine of up to ₹1,00,000. This fine is for the designated partners who do not follow the rules. The designated partners have to be careful because they can be fined up, to ₹1,00,000.
Income Tax Penalties
• Late filing fee under Section 234F: up to ₹5,000
• Interest under Sections 234A, 234B, and 234C
• Disallowance of carry forward losses (except house property loss)
LLP Annual Compliance Checklist
| Compliance Activity | Mandatory Due Date |
| Filing of Form 11 | 30th May |
| Filing of Form 8 | 30th October |
| Income Tax Return Filing | 31st July / 31st October |
| Tax Audit (if applicable) | 30th September |
| Maintenance of Books of Accounts | Throughout the year |
FAQs on LLP Annual Compliance
Q1. Is annual compliance mandatory for LLPs with no business activity?
Yes, annual compliance is mandatory even for inactive or dormant LLPs.
Q2. Do LLP need to file Form 11 every year?
The Form 11 needs to be filed every year. This is something that has to be done each year no matter if there are any changes, with the partners of the Form 11 or not. The Form 11 is required to be submitted.
Q3. Is audit compulsory for all LLPs?
No an audit is needed only if the business turnover is than ₹40 lakh or the contribution is more than ₹25 lakh.
Q4. What is the late fee for LLP annual filings?
The late fee is ₹100 per day with no maximum limit for both Form 11 and Form 8.
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