In the case of a limited liability partnership (LLP), the returns need to be filed at regular interval of time to be in compliance. The failure to file could lead to penalties. However, speaking of differences, it is needed to mention that, indeed, an LLP has some compliances differing from those of a private limited company but they must follow every year though the fines in case of noncompliance might be really heavy. LLP is an individual / separate legal entity and it comes under the ministry of corporate affairs. (MCAs).

What is LLP?

An LLP is a partnership between a limited numbers of partners where each partner owes a limited liability for any debts that occur in the partnership. They are separate legal entities bound by certain legal obligations and the partners of the LLP must bear the responsibility of adhering to the rules to maintain compliance. Limited Liability Partnership are required to file their statement of accounts & solvency within 30 days from the end of six months of the financial year and Annual return within 60 days from the end of the end of the financial year so the conclusion is the statement of accounts & solvency is to be filed on or before October 30^th of every financial year, and the annual return for LLPs is due on May 30^th every year, even if LLP has not completed any business in that specific financial year.

Advantages of Limited Liability Partnership

There are some advantages as below:

• Power to sue and be sued
• Power to open a bank account
• Ease of Conversions and settlements
• Legal Protection
• Upholds the reputation and creditworthiness of the company
• Power to indulge into all types of legal contracts
• During the post establishment, A LLP can have limitless partners
• A LLP can raise funds from Partners, Banks, and NBFCs

Advantages for LLP in corresponding to Private Limited Company

• Exception from the preservation of Minutes Book, statutory registers and adjustable tax rates
• AGM is not mandatory and there is no need of shareholding
• There is no boundary on the highest number of partners

Checklist for LLP Annual Compliances in India

• LLP annual return must get filled before May 30^th of each Financial Year
• LLP Account & Solvency must get filled before October 30^th of each financial year
• LLP must file income tax return each year irrespective of income, profit or loss.

In addition to above mandatory compliances, LLP must also file income tax return, GST return as per MCA guidelines.

Documents required for LLP Annual Company Compliances

• All LLPs required to maintain their incorporation documents
• Names of Partners
• Proof of fee payment
• Statement of account & solvency with annual return filed by LLP with registrar
• LLP agreement
• Financial Statements
• Digital Signature
• Contribution of the Partners
• Details of Penalties
• Principal Business of the enterprises

Consequences of non-compliances for LLPs

A LLP must comply with compliances as an unsaid obligations that must be fulfilled. However, failing to adhere to the same might charge heavy penalties or fines that make you financial health vulnerable. To avoid the same so be aware

• The LLP and its partners can be charged as much 10,000 which can be further exceed 500,000
• Schedule I of Limited Liability Partnership Act, 2008 is applicable in case of the absence of the Limited Liability agreement
• Within 30 days of incorporation LLP has to fill out E-Form 3 and Form 4 if failing to do so then fee is Rs. 100 each day with an additional fee