Corporate compliance is an essential part of the corporate function of an LLP, failing which stringent penalties are imposed under the provisions of the LLP Act. Being a registered entity, LLP is treated as an artificial legal person in relation to regulatory compliance provisions. After registration, an LLP must comply with the legal and regulatory requirements of various laws. The designated partners are required to ensure the compliance of the provisions under the respective acts and rules while conducting business activities and regulatory procedures.
While running the business, an LLP must comply and adhere to various legal process and procedures as required under the LLP Act and Rules. For an LLP, compliance is ensured by way of filing of periodic and event-based returns with the ROC.
A. Annual Statutory Compliances
LLPs registered on or before 30th September of a year are required to close their financial year on 31st March of the following year. All LLPs are required to file the following returns every year mandatorily whether it is carrying any business or not.
An LLP registered on or before 30th September of a year is required to file returns with the ROC as follows:
1. Annual Return (Form 11)
An LLP is required to file its annual returns with the ROC (Form 11) within 60 days of closure of its financial year. Therefore, annual returns need to be filed on or before 30th May every year.
2. Filing of Annual Accounts (Form 8)
Every LLP has to maintain books of accounts as per double entry system of accounting and prepare a Statement of Accounts and Solvency (Accounts) every year ending on 31st March. The LLP has to file such accounts with the Registrar of LLPs (Form 8) within 30 days from the end of 6 months of such financial year. Therefore, annual accounts need to be filed on or before 30th October every year.
If the annual turnover exceeds Rs.40 lakhs or contribution exceeds Rs.25 lakhs, the LLP shall be required to get its accounts audited by a Chartered Accountant.
B. Event-Based Compliances
Being a registered entity, LLP must intimate any changes in LLP to the Registrar. The following are few instances that require an LLP to file returns with the Registrar of Companies from time to time:
- Changes in Partners/Designated Partners - Admission, Assignment of LLP Rights Resignation and Removal thereof.
- Increase / Reduction of capital contribution
- Creation/Modification/Satisfaction of Charges on assets
- Change of LLP Name
- Change in Registered Office of the LLP