Full details about LLP from Registration to Compliances

What is an LLP?

Limited liability partnership is a body corporate and legal entity separate from its partners. LLP has fewer compliances as compared to registered companies.

In this article, we are going to discuss

• Registration process
• Admission/Cessation of Partner
• Compliances to be done by LLP

How to Register an LLP in 3 Steps?

It's mandatory under LLP Act that applicant has to appoint at least two individuals as designated partners and they should be residents in India.

Step 1: Reservation of Name

There are two ways for reservation of name for LLP. one is through Form RUN-LLP (Fees Rs.1000) Separately filed and other ways are to reserve the name along with the application of Incorporation in the form FiLLiP.

Step 2: Filing Main Application form i.e. Form FiLLip

This Form helps in the incorporation of new LLP, allotment of DIN, and reservation of name of LLP. It is mandatory to attach the DSC of Designated Partner (DP) before filing the form. The Fees for submitting the form shall depend on the Contribution of LLP.

Documents required to be annexed under this form

• Subscribers sheet including consent of subscribers
• Proof of the address of registered office of LLP
• In Case DP doesn't have DIN then he needs to attach Proof of identity and address
• NOC from the owner of the property
• Copy of utility bills (not older than 2 months)
• Detail of LLP(s) and/or Company(s) in which partner or designated partner is a director/partner

Step 3: FORM 3 Registration of LLP Agreement

This Form is filed within 30 days of Incorporation of LLP along with the LLP Agreement. The LLP agreement is printed on the stamp paper which shall be different for every state.

After Incorporation three most important work that needs to be done are applying for PAN &TAN and Opening Bank account.

Procedure to Add new / Cessation Designated partner/Partners in LLP in just 2 Steps

1. Form 3 Registering Supplementary deed

For admitting a new partner first condition is that consent for all existing partners is Must.
Secondly, Prepare the Supplementary Deed to the Original LLP Agreement to give the effect of admission of a new partner.

Once, the person is admitted as a new Partner, the LLP has to file Form 4 within 30 days from the date he/she becomes Partner in the LLP.

2. Form 4 is required to be filed for every appointment, cessation, and change in name/address/designation of a designated partner or partner

Its needs to be filed within 30 days of the change

There are two attachments that go along with the form

• Consent of Partner (Form 9)
• Certified Copy of Resolution of LLP

FORM 3 and 4 linked filing with appointment/cessation i.e., they need to be filed together for completing the admission/ cessation of a partner.

Mandatory LLP Compliance

1. LLP Annual Return (Form 11)

Annual Return or Form 11 contains the details of all the partners, their contributions towards the LLP, etc.

Every LLP is required to file Annual Return in Form 11 to the Registrar within 60 days of closer of financial year i.e., has to be filed on or before 30th May every year.

2. Statement of Account & Solvency (Form 8)        

It consists of information related to the statement of assets of the LLP and liabilities and the statement of income and expenditure of the LLP.

Form 8 should be filed within 30 days from the end of 6 months of the end financial year. i.e., by 30th October of each financial year.

Disclosure under MSME Development Act, 2006 is a mandatory attachment to the form.

If there is a delay in filing Forms 8 and 11 of LLP, you will have to pay the penalty of Rs. 100 per day of default

3. Maintenance of Books of Accounts

All LLPs are required to maintain their books of accounts on a cash basis or accrual basis.

4. Filing ITR-5

Every LLP has to file an income tax return for every year irrespective of income or losses coming in books.

Due Date of ITR: 31^st July,20xx (FY 20-21-31^st December 2021)

If tax Audit is applicable then

• Tax Audit: 30^th Septemeber,20XX (FY 20-21-15^th January,2022)
• Due date of ITR: 31^st October 2021(FY 20-21-15^th February 2022)

5. DIR-3 KYC

Each designated partner for an LLP is required to file form DIR 3 KYC on for before 30th September of each financial year.

6. LLP Audit Applicability

LLP whose turnover in any financial year exceeds 40 lakh rupees or whose contribution exceeds 25 lakh rupees is required to get its accounts audited.

The audit of LLP shall be done by a Chartered Accountant in Practice only.

An auditor or auditors of a limited liability partnership shall be appointed for each financial year of the LLP for auditing its accounts.

7. GST Registration Applicability

Every business with annual turnover exceeds Rs. 40 lakhs (Service providers 20 lakhs) are required to Apply for GSTN.

It is not mandatory to obtain GST immediately after incorporation of the LLP. The LLP can obtain this registration as and when required