To ensure the smooth functioning of the LPP compliance and procedural matters need to be completed on time. The overall compliance requirement for an LLP is less cumbersome when compared to the post-incorporation LLP compliance required for a company. However, to avoid heavy penalty make sure LLP Compliance are completed on time as LLP is also a separate artificial judicial person.
Filing LLP Agreement
The duties and rights of partners are governed by the LLP Agreement. Within 30 days, LLP Agreement must be filed with the Ministry of Corporate Affairs after incorporation of an LLP. LLP agreement is mandatory for all LLPs and even in the absence of a specific LLP Agreement, an LLP Agreement must be executed, specifically excluding applicability of any or all paragraphs of Schedule I (default LLP agreement).
A heavy penalty of Rs.100 per day of default with no ceiling on the maximum fine will be charged if LLP agreement will not be filed within 30 days of incorporation. Hence, care must be taken to ensure that the LLP agreement is properly executed and filed within the due date. LLP compliance must need to be fulfilled accurately.
LLP Seal: For opening the bank account of the company and applying for PAN, there must be a requirement of the LLP seal. Hence, two rubber seals – round type with LLP name and LLP name with designation can be purchased on the incorporation of an LLP.
Letterhead: LLP stationary like letterhead, invoice, official documents, etc., can be prepared with the LLP name and registered office of the LLP.
Book of Accounts: A proper books of accounts on cash or accrual basis are required to be maintained by LLPs. Book of accounts for an LLP can be maintained manually with the register kept at the registered office or electronically through accounting software like Tally or Quickbooks.
LLP PAN Application
Pan Card can be applied online for the Post incorporation of an LLP. PAN application (Form 49A) is used for applying for PAN for LLP. The PAN acknowledgment must be sealed by a Designated Partner of the LPP and signed, once, an application is submitted online. The signed application must then be couriered to the NSDL office for issue of PAN card. The PAN card of the LLP will be sent to the registered office address of the LLP in 10 – 20 working days. Must follow All the procedure of LLP compliance on the timely basis.
LLP Bank Account Opening
Bank account for an LLP can be opened easily, as it is considered to be a corporate entity. The following documents of the LLP must be submitted for the opening of LLP bank account:
- Copy of the LLP agreement
- Copy of the Incorporation document and DIN of the designated partners
- Copy of the LLP Registration Certificate issued by the ROC
- Copy of LLP-IN issued by the ROC
- Copy of the Resolution to open a bank account
- List of authorized person/s with the specimen signatures to operate the account duly attested by Designated Partners
- Copy of PAN allotment letter
All documents must be signed by a Designated Partner and must have the seal of the LLP.
There is no concept of appointment of the auditor in an LLP, as there is no requirement for an audit of the book of accounts of an LLP unless turnover exceeds Rs.40 lakhs or capital contribution exceeds Rs.25 lakhs.
Filing LLP Annual Return
LLPs in India must file its Annual Return within 60 days from the end of close of the financial year and Statement of Account & Solvency within 30 days from the end of six months of the close of financial year. Unlike Companies, LLPs mandatorily have to maintain their financial year, as for April 1st to March 31st. Therefore, LLP annual return is due on May 30th and the Statement of Account & Solvency is due on October 30th of each financial year. Care must be taken again to ensure LLP Annual Return is filed on time, as non-compliance attracts a penalty of Rs.100 per day of default with no ceiling. Know more about filing LLP annual return. Keep a trach on the changes in LLP Compliance.