Top Mistakes to Avoid while Incorporating a Company in India
Top mistakes that aspiring entrepreneurs often make while incorporating a company in India. By addressing these pain points, we aim to provide valuable insights and practical guida .....
For a Limited Liability Partnership (LLP), the returns shall be filed regularly for securing compliance and avoid the hefty penalties provided under the law for its non-compliances. An LLP has limited compliances to be ensured every year, which are immensely less as compared to the compliance obligations placed on the private limited companies. However, the fines and penalties are quite high. While non-compliance might only cost a private company rupees 1 lakh in terms of penalties and fines, it might cost an LLP up to 5 lakh
An LLP is a separate legal entity; so, it is the responsibility of the designated partners to keep and maintain proper books of accounts and file an annual return with the Ministry of Corporate Affairs (MCA) annually. LLPs are not obliged to audit their accounts except where their annual turnover is more than forty lakh or if the contribution is more than twenty-five lakh. Therefore, an LLP is exempted from getting the books of accounts audited if the said conditions are fulfilled, making the process of the annual filings simpler.
LLPs in India are required to file an annual return within 60 days from the end of the financial year and statement of account & solvency within thirty days from the end of six months of the closure of the financial year. In addition to the annual return, LLPs are also required to file an income tax return every year mandatorily. MAG provides complete LLP compliance services which include annual filing of LLP and complying with the filing of the income tax return.
All registered LLPs are obligated to have their books of accounts in place and fill in data for the profit made, and other financial data in regards to business, and submit it in Form 8 annually. Form 8 needs to be attested by the designated partners and should also be certified by a practising chartered accountant or a practising company secretary or a practising cost accountant. Failure to file the statement of accounts & solvency report within the time limits prescribed tends to impose a fine of INR 100 per day.
Annual Returns are required to be filed in the prescribed Form-11. This form aims to provide a summary of management affairs of an LLP, like numbers of partners along with their names. Form 11 is required to be filed by 30th of May every year. We can provide you expertised assistance in LLP annual return online filing in Delhi, India.Form 11 needs to be certified by a Company Secretary in whole-time practice if the total contribution of partners exceeds Rs. Fifty lakhs or turnover exceeds Rs. 5 crores,
As discussed earlier, LLPs whose turnover is more than forty lakh or whose contribution margin has exceeded twenty-five lakh have to get the books of account audited by a practising CA. The deadline to file the income tax return for an LLP which are liable to get his accounts audited is 30th of September of the relevant assessment year.
The penalty for non-compliance by an LLP varies depending on the specific non-compliance, but it can include fines, legal action, and even dissolution of the LLP.
Designated partners in an LLP are responsible for ensuring compliance with the LLP agreement and all statutory requirements.
LLPs are required to audit their accounts if their annual turnover exceeds Rs. 40 lakhs or if their total capital contribution exceeds Rs. 25 lakhs.
The deadline for filing an annual return for an LLP is within 60 days from the end of the financial year.
Form 8 is the statement of account and solvency that needs to be filed annually by LLPs, and it must be certified by the designated partners of the LLP..
Form 11 is an annual return, which must be filed by every LLP within 60 days of the end of the financial year.
The deadline for filing income tax return for an LLP is July 31st of each assessment year.
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