Annual Filing Process for Registered LLP for the year 2018 and action taken by various RoC for not filing Annual Returns and Financial Statements
Annual Filings of the LLP for the year 2018 are coming onto neck. Now every Limited Liability Partnerships (LLPs) which are registered with the Ministry of Corporate Affairs (MCA) have to file the Annual Returns and Statement of Accounts for the Financial Year 2018.
We would like to remind all the designated partners of an LLP that there are three main Compliance which are mandatory for the LLP for the Financial Year 2018. These Compliance are listed below:
(i) Preparation and filing of Annual Return under the LLP Act, 2008;
(ii) Preparation and filing of Statement of the Accounts or you can say it Financial Statements of the LLP
(iii) Filing of Income Tax Returns under the Income Tax Act, 1961.
Now most of the Entrepreneurs in India or startups are confused that whether filings of the Annual Returns are mandatory thing even if they are notdoing the business?
The answer to above question is yes! Every LLP has to maintain the compliance even if they are not doing the business.
The reason is simple you know that you are not doing the business but government of India don't know that you are doing business or not. Through the annual statements or annual filings you are providing information to the government about your organisation.
Let's understand which LLP's have to file the Annual Returns and Income Tax Return for the year 2018:
(i) Filing Annual Return of LLP:
Annual Returns in LLP Form 11 is a Summary of LLP's Partners like whether there is any changes in the management of the LLP.
Every LLP is required to file Annual Return in Form 11to the Registrar within 60 days from the closure of financial yeari.e. the Annual Returns has to be filed on or before 30th May every year and for financial year ended on 31st March, 2018 the last date for filing annual return is 30th May, 2018.
Form 11 or Annual Return is Applicable on those LLPs which are registered till the 30th September, 2017. If your LLP is registered on or after the 1st October, 2017 then you do not require to file LLP Annual Return in the year 2018.
(ii) Filing Annual Accounts or Statement of Accounts or P&L and Balance Sheet:
Every LLP or any other legal entity from solo firm to Private limited company have to prepare their accounts to get the information regarding your business that how much profit is earned by your LLP.
Every LLP have to close their accounts till 31st march 2018 on this year. There are lots of software from waveapps to simple spreadsheets where you can maintain the accounts.
All LLPs are required to maintain the Books of Accounts in Double Entry System and has to prepare a Statement of Solvency (Accounts) every year ending on 31st March.
LLP Form 8to be filed with the Registrar of LLPs on or before 30th October everyyear. Therefore, 30th October, 2018 is the last date for filing annual accounts this year.
Form 8 or Annual Statements for the year 2018 is applicable on those LLP which are registered till the 30th September, 2017. If your LLP is registered on or after the 1st September, 2017 then you do not require to file LLP Annual Statements in the year 2018.
(iii) Filing Income Tax Returns of the LLP:
Every LLP have to file the Income Tax Returns for the year 2018. In simple words LLP is a separate legal entity so with the partner's income tax return you have to always file the LLP Income tax return where you show your LLP's Income and calculate the tax liability and pay the taxes to government of India. LLP have to calculate their tax liability from their financial statements for the year 2018.
Mostly Income Tax Return Last date is 31st July 2017 (unless extended) in this year for the Individual and legal entities. However, in case where Audit is required, the last date for filing Income Tax returns is 30th September 2018.
If the LLP has not carried any business during the year ended 31.03.2018, the LLP has to file a NIL IT RETURN with Income Tax Authorities.
Filing of Income Tax Return is Applicable on all the LLP's which are registered during the financial year 2017-18. Therefore, its not a matter if your LLP is registered after the 01-10-2017 still you have to file Income tax return from the date of incorporation till 31-03-2018.
Audit Requirement under LLP Act, 2008:
Only those LLPs whose annual turnover exceeds Rs. 40 lakhs or whose contribution amount exceeds Rs. 25 lakhs are required to get their accounts audited by a qualified Chartered Accountant. Meaning thereby, your all the statements of accounts is certified by the CA.
Audit requirement under Income Tax Act, 1961:
Audit of accounts is mandatory requirement under Income Tax Act when the annual turnover of LLP is more than Rupees one hundred lakhs.
Certifications from Company Secretary in Practice (PCS):
In case of LLPs with turnover more than five crore rupees in a financial year or contribution more than fifty lakh rupees, the annual return shall be certified by a Company Secretary in Practice.
Summary: The Following are the Returns to be filed by an LLP for the year ended 31.03.2018:
Nature of filing
Name of the Authority
Last date for filing
Annual Return (Form 11)
Registrar of LLP
Accounts (Form 8)
Registrar of LLP
Income Tax Return (where Audit is not mandatory)
Income Tax Authorities
Income Tax Return (where Audit is mandatory)
Income Tax Authorities
Digital Signature (DSC) Requirements:
While uploading e-forms Digital Signatures of any 2 Designated Partners are required for filings.
Consequences for Non-Filing LLP Annual Returns and Accounts:
If there is delay in filing Form No. 8 and Form No. 11 of LLP, you will have to pay penalty as applicable on today’s date. If filing is not done within stipulated time, there is penalty of Rs. 100 per day till it is complied. You cannot close or wind up your LLP without filing Annual Accounts.
So if you don’t file mandatory forms on time with the MCA, your LLP turns into unlimited statutory liability till the day it is complied.
The provisions of the Act require LLPs to file the documents like Statement of Account and Solvency (SAS) in Form 8 and Annual Return (AR) in Form 11 within the time specifically indicated in relevant provisions.
The LLP Act contains provisions for compounding of offences which are punishable with fine only.
Further, for defaults/non-compliance on procedural matters such as time limits for filing requirements provisions have been made for charging default fees (on daily basis) in a non-discretionary manner.
To avoid all the dangerous consequences of heavy penalty, it would be advisable to comply on time within stipulated due date of filing.
Actions taken by Registrar of Companies against the LLPs who have not filed their Returns and Statement of Accounts:
Apart from the above consequences and penalties, the Registrar has right to strike off the LLPs who are not filing their Financial Statements (Form 8) and Annual Returns (Form 11) for a period of two immediate financial years.
In the line of above right and under the provisions of Section 75 of the LLP Act, 2008 read with Rule 37 of the LLP Rules, 2009, the following registrar of Companies has issued public notice proposing striking of the name of LLPs who are not filing their Annual Returns and Financial Statements:
(i)RoC - Karnataka (Pubic Notice dated 3rd April, 2018)
Therefore, from the above public notices it is crystal clear that the various Registrars has started exercising powers under section 75 read with Rule 37 for striking off the name of LLPs who are in default of filing Annual Returns and Financial Accounts. It is advisable to all the Designated Partners to complete their Annual Filings in respect of LLPs to avoid striking off the name of LLPs and prevent from disqualification of DPIN (DIN).
It seems that all the RoCs have clear instruction from the Gobernment of India to strike off the name of LLPs who are not filing their Annual Returns and Financial Statements.
Important Points to be remembered:
If you are thinking about the Filing of Annual Return and Financial Statements under LLP Act, and Filing of ITR under Income Tax Return yourself then we suggest you must hire a professional because during the filings you need a attestation from the professionals and it's not easy to file and save your taxes because it needs planning and preparation.
If your LLP are not doing the business and even till the date you have not opened a Current Bank Account then also you must file the NIL Returns else liability and penalties will arise and in the future you can't close your LLP easily.
CS RASU SHARMA is founder and Managing Associate of M/s Rasu & Associates - Company Secretaries. Rasu has a blended experience in the Corporate Advisory, Indirect Taxation and other regulatory matters. He is a good team player and has a long term vision of developing professional organizations.
He believes in customer satisfaction with the team. Rasu has worked with M/s Askus Legal Consultants and M/s LEXport - Advocates and Legal Consultants.
He also assisted in developing compliance tool for various Companies some of them are InterGlobe Aviation (IndiGo), Denso India, Verizon, Interglobe Hotels, Triguna Hospitality, Interglobe Technologies etc.
He also worked for Central Excise Compliance of Pioneer India, Honeywell International, Hero MotoCorp, Kanematsu India, Daifuku, ITO Electronics etc.
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