Limited Liability Partnerships (LLPs) are an attractive business structure in India, providing the benefits of limited liability along with the flexibility of a partnership. However, to maintain the status of an LLP, there are various legal and regulatory compliances that need to be fulfilled.
These compliances ensure that the LLP operates smoothly and remains in good standing with the government. Below, we discuss the key compliances that LLPs must adhere to, including for those considering LLP registration in Bangalore or online LLP registration in Bangalore.
1. Filing of Annual Return (Form 11)
One of the primary compliance requirements for an LLP is the filing of an annual return. Form 11 must be filed with the Ministry of Corporate Affairs (MCA) each year. This form contains details such as the partners, their contributions, and the total capital invested in the LLP. The return must be submitted within 60 days from the end of the financial year (i.e., by May 30th).
2. Filing of Statement of Accounts and Solvency (Form 8)
LLPs are also required to file Form 8 annually. This form includes the LLP’s balance sheet and profit & loss account along with a statement of solvency. It must be filed within 30 days from the end of the six months after the financial year (i.e., by October 30th). The purpose of this filing is to ensure that the LLP is financially solvent and can meet its liabilities.
3. Income Tax Filing (ITR-5)
LLPs with Online LLP registration in Bangalore are required to file their income tax returns under ITR-5 annually. This is mandatory regardless of whether the LLP has any income or not. The income tax return must be filed on or before July 31st of each assessment year, unless extended by the government. The return must include details of the LLP’s income, expenses, and profit distribution among partners.
4. GST Registration and Filing (if applicable)
If an LLP's turnover exceeds the prescribed threshold limit (₹20 lakhs for most businesses), it must obtain GST registration. This applies to LLPs involved in the supply of goods or services. Once registered, the LLP must file GST returns on a regular basis (monthly, quarterly, or annually) to report its GST liabilities and claim input tax credits. If an LLP’s turnover is below the threshold, GST registration is not mandatory but can be voluntarily opted for.
5. Maintaining Statutory Books and Records
An LLP must maintain proper books of accounts as per the provisions of the LLP Act, 2008. These books should include financial records such as invoices, bills, receipts, and documents that substantiate the transactions of the LLP. These records must be kept for at least 8 years and should be available for inspection if required by the authorities.
6. Change in Partners or Business Details
If there are any changes in the partners, their share of capital, or other business details, the LLP must file the necessary forms with the Ministry of Corporate Affairs. Form 4 must be submitted for changes in partners or their details. Any such changes must be reported within 30 days.
7. Other Compliances
Depending on the nature of business, LLPs may need to adhere to additional compliances such as the Foreign Exchange Management Act (FEMA), Labour Laws, or industry-specific regulations.
Conclusion
For those looking to start an LLP, LLP registration in Bangalore is a critical first step. The online LLP registration in Bangalore process is convenient and involves submitting key documents such as proof of identity, address, and the LLP agreement.
Once registered, the LLP must adhere to various compliances, including filing annual returns, maintaining financial records, and ensuring timely tax filings. Adhering to these regulations not only ensures smooth operations but also helps maintain the LLP's legal standing, avoiding penalties or legal complications.
