What are Annual Filings? (Overview)
Limited liability partnerships (LLPs) are required to meet fewer criteria for compliance on filing annual returns, in comparison to private limited companies. LLPs are required to provide information related to the statement of accounts, and returns, on an annual basis. Penalties, however, are huge for failure to comply. Entities that don't provide the requisite information are fined heavily, with penalties that can go up to Rs. 5 lakhs.
What Are The Benefits of Filing Annual Compliances For LLPs
- Higher Credibility:Annual compliance provides for higher credibility to the organization for loan approvals or any other similar requirements.
- Record of Financial Worth:Annual compliance filings by LLP’s provide records to other companies regarding their financial worth, which may result in new and interested investors.
- Stays Active and No Penalties:With regular filings, LLPs are not declared as defunct, and stays active. Also, annual compliance filings are mandatory and hence involve penalties (additional fees) to LLPs, when they default on filings.
- Conversion or Closure:Regular annual compliance filings facilitate easier conversion of Limited Liability Partnerships into other types of companies, as well as quicker resolutions in case of dissolution of partnerships.
What Are The Important Requirements of Filing Annual Compliance?
Maintain Discipline
For businesses to meet their annual compliance requirements, all it requires is for them to remain disciplined and vigilant. However, being callous can result in hefty fines and penalties. No to mention, LLPs that meet annual compliance requirements are often granted loans quicker or readily funded by investors, as these businesses are compliant with the requirements of the Registrar of Companies (RoC).
Regular Updates From The RoC (Registrar Of Companies)
With an on-call company secretary throughout the year, you can ensure that your business is run in accordance with the laws in force. Our team would keep you up-to-date on all the changes made by the RoC, throughout the year.
What are the Documents Required Filing of Annual Compliance?
Form 8
You must file the Form 8 inside 30 days from the completion of 6 months after a financial year ends. Two designated partners can sign this form digitally. Also, a company secretary/chartered accountant/cost accountant must certify the same. There are 2 parts in a Form 8 -
- Part A - The solvency statement
- Part B - Statement of expenditure & income, statement of accounts.
For not filing the Form 8 on time, a penalty of Rs 100 per day will be imposed.
Form 11
This form contains details such as the total number of designated partners, details of partners along with details of body corporates as partners, contributions received by the partners and summary of all partners. All LLPs must file the Form 11 within 60 days after the end of the financial year, along with the fee prescribed. Therefore, the LLPs should file their Form 11 by 30th May every year.
An LLP will not be allowed to close or wind up till it files all its annual returns. Therefore, all LLPs must file their annual returns on time, to avoid penalties.
