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Limited Liability Partnership is a individual/seperate legal entity recorded under the Ministry of Corporate Affairs (MCAs) in India. For registration into an LLP, there should be at most limited two persons as partners where mandatorily one has to be an Indian citizen and a resident. The partners in an LLP should take responsibility for maintaining a proper book of accounts, filing an Income Tax Return, and submitting an annual return with the Ministry of Corporate Affairs (MCA) on every financial year.
To establish a Limited Liability Partnership (LLP), the returns should be filed periodically for maintaining compliance and escape substantial penalties under the law for non-compliance. A Limited Liability Partnership has only few compliance to be succeeded every year which is certainly lower as compared to the compliance needs to be placed on the private limited companies. However, the fines seem to be quite large. While non-compliance might only impose a Private Limited company INR 1 lakh in terms of penalties, it might impose an LLP up to INR 5 lakh.
Limited Liability Partnerships gets a separate legal institution; therefore, it is the duties of the elected partners for simultaneously maintain a proper book of accounts and filing an annual return in consonance with the Ministry of Corporate Affairs (MCA) yearly. Limited Liability Partnerships are not needed to audit their 'books of account except' where their yearly turnover is more than INR 40 lakhs or if the investment or contributions to the company is more than INR 25 lakh. Therefore, an LLP is not required to get their books of account audited if it fulfils the condition as mentioned above, making the process of annual filing simpler.
Limited Liability Partnerships are required to file their Statement of Account & Solvency within thirty (30) days from the end of six (6) months of the financial year and Annual Return within sixty (60) days from the end of the fiscal year. Dissimilar to Companies, Limited Liability Partnerships are mandatorily required to maintain the financial year, from April 1st to March 31st. Hence, the Statement of Account & Solvency is to be filed on or before October 30th of every fiscal year, and the annual return for LLPs is due on May 30th every year, even if the LLP has not completed any business in that specific financial year. Some of the annual filings are mandatory whether the LLP has begun any business or not.
Significant Benefits: Powers enjoyed by LLPs are as follows:
Overcharge:
A surcharge shall extend the measure of income-tax at the rate of 12% of such tax, wherever total income exceeds Rs. 1 crore rupees. Mostly, the surcharge shall be subjected to marginal relief. It is where revenue exceeds Ra. 1 crore rupees, the total cost payable as income-tax. The tax does not pass the total amount payable as income-tax on total revenue of Rs. 1 crore rupees by higher than the amount of income that exceeds Rs. 1 crore rupees.
Health And Education Blueprint:
The amount of income-tax and the mentioned surcharge, should be further increased by health and education cess measured at the rate of 4% of those income-tax and surcharge.
Alternative Merest Tax:
Tax due by LLP cannot be less than 18.5% (raised by Surcharge and HEC) of "adjusted total income" as per 'section 115JC'.
Form 11 is a Yearly return that is to be filled by all LLPs irrespective of turnover throughout the year. Even when an LLP does not convey out any services or business during the business year, Form 11 needs to be filed. Apart from Essential data about Name, Address of LLP, details of Partners/ Designated Partners, other information that need to be submitted are:
LLP Form 11 Due Date For Annual Return Filing
30/5/2020
The Due Date For IT Returns: 31.07.2020 / 30.09.2020
The last date for filing income tax returns for LLPs, which does not require Tax Audit July 31, 2020, and if Tax Audit is then needed due to date for IT Returns for LLP would be September 30, 2020.
LLP form 8 Due date- 30.10.2020
Late Fees For Form LLP 8 And LLP 11 Filing
If there is a noticeable delay in filing Form 8 and 11 of LLP, a penalty of Rs. 100 per day per form is payable from the due date of filing return till the actual date return is filed.
What is the method of review of documents that are filled with ROC?
The First has to login to the Mca portal. Proper fees have to be paid and then following documents of LLP will be available for inspection:-
What is "Statement of Accounts and Solvency"?
Every LLP has to file LLP Form 8 annually, known as "Statement of Accounts and Solvency" which contains the information relates with financials of LLP like asset-liability etc.