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Limited Liability Partnership Compliance

Let’s discuss a limited liability partnership’s (Limited liability partnership compliance) yearly compliance in a way that feels more like a conversation than a task. First and foremost, maintaining Limited Liability Partnership compliance is essential to avoiding fines. An annual return, which essentially summarizes all of your business operations for the year, is required of you. In addition, if your turnover exceeds a specific threshold, you must prepare financial accounts and have them audited. Typically, these documents and papers must be submitted within a few months after the fiscal year’s conclusion. The good news is that this process is much simpler if you maintain books throughout the year.

LIMITED LIABILITY PARTNERSHIP COMPLIANCE

Annual compliance

1.Accounts Of Statements and Solvency

All enrolled limited liability partnership Compliance must have their books of accounts in order, complete information about their profit margins and other business-related financial data, and submit it on Form 8 annually. In addition to being certified by a practicing chartered accountant, company secretary, or cost accountant, Form 8 needs to be signed by the signatures of the authorized partners. A charge of where settlement is reached, a fine of Rs.10 may be imposed on both parties in settlement. Form 8 must be submitted by October 30 of each fiscal year.

2.Submitting an Annual Return

The required Form-11 must be used to file annual returns. This document is regarded as a summary of the Limited liability partnership compliance management affairs, including the names and numbers of partners. Don’t forget—Form 11 is due annually, and the filing deadline is May 30th.

3.The Income Tax Act's filing and auditing requirements

As previously mentioned, under the Limited Liability Partnership Act of 2008, limited liability partnerships with a turnover of more than “Either a total funding of ₹40 lakh or any individual donation that crosses ₹25 lakh is considered under this limit are required to have their books of accounts audited by licensed chartered accountants. An LLP’s tax return must be filed by September 30th in order for his records to be audited.

Incorporation of Limited liability partnership compliance (Section 12)

1. Registering the Limited liability partnership compliance:

After the required documents are submitted, the Registrar (official in charge) will keep the incorporation documents. Once all the documents check out, here’s what the ROC will do next:
i) Register the Limited liability compliance within 14 days.
ii) Issue a certificate confirming that the LLP has been officially set up with the name specified in the document.

2. Proof of Compliance:

The Registrar can accept a statement as proof that the requirements for setting up the Limited liability partnership compliance have been met.

3. Certificate of Incorporation:

The certificate that confirms the Limited liability partnership compliance is officially set up will be signed by the Registrar and stamped with their official seal.

4. Legal Proof:

This certificate is the official and final proof that the Limited liability partnership compliance exists with the name mentioned.

Registered Office and Changes (Section 13)

1. Registered Office:

Every LLP must have an official address, called the registered office, where all official documents and notices will be sent.

2. Serving Documents:

Official documents can be sent to the LLP by post (like regular mail or registered mail), or through other approved methods. They will be sent to the registered office or another address declared by the LLP.

3. Changing the Registered Office:

If the LLC plans to move its office to another location, it must notify the Secretary. The change will only take effect once the notice is filed with the Registrar.

4. Penalties:

If the LLP fails to follow the rules about the registered office, it will be fined ₹500 per day, up to a total of ₹50,000.

Reservation of Name (Section 16)

1. Applying to Reserve a Name: If you want to use a specific name for your new LLP( liability partnership Compliance) or if you want to change your existing LLP’s name, you can apply to the Registrar to reserve that name. The application needs to be done in a certain format and include a prescribed fee.
2. Name Reservation: If the Registrar agrees that your requested name meets the rules, they can reserve the name for your LLP for 3 months.

Changing or Rectifying the LLP Name (Section 17)

1. Name Conflicts:

If an LLP’s name is too similar to the name of another LLP, company, or a registered trademark, and it could cause confusion, the Central Government can order the LLP to change its name. This can happen if the name was registered by mistake or if it’s too similar to another entity’s name. The LLP or the owner of the conflicting trademark or company can request the name change. Time Limit: The LLP has 3 months to change its name once the order is issued.If a trademark owner wants to request a name change, they must do so This must be completed within three years from the date the LLP was formed or officially registered under its present name.

2. Notifying the Registrar:

i) Once an LLP( liability partnership Compliance) changes its name, it must inform the Registrar within 15 days and submit the government’s order to update its records.
ii) The Registrar will then issue a new certificate of incorporation with the updated name.
iii) The LLP must also update its name in the LLP agreement within 30 days of getting the new certificate.

3. Failure to Comply:

i) If the LLP does not change its name as ordered, the Central Government will assign a new name to the LLP and update the Registrar’s records.
ii) Once the name change is approved, the LLP obtains a new certificate reflecting the name change.
iii) However, the LLP can change its name again later if needed.
iv) A daily penalty of ₹100 may be charged, capped at ₹1,00,000 for the LLP and ₹50,000 for each individual partner.

STEPS TO INCORPORATE Limited liability partnership compliance

1.Request a DPIN (Designated Partner Identification Number).

Everyone who is or intends to become a designated partner in the new LLP must first apply for their Designated Partner Identification Number (DPIN). The DPIN allocation application must be submitted on Form DIR-3. Documents (typically Aadhaar and PAN) must be scanned and attached to the form. A company secretary, chartered accountant, or cost accountant working full-time should also sign the form.

2.Name Approval

To select an LLC( liability partnership Compliance) name, applicants must use the RUN-LLP (Unique Entity Name) tool, operated by the Registry. However, it is advised that you use the MCA portal’s free name search feature before entering the name in the form. Based on the search parameters entered, the system will provide a list of names of current businesses and limited liability partnerships that are very similar.This helps you pick a name that stands out and isn’t already taken by someone else.. Only if the name is not deemed undesirable by the Central Government and does not sound like a trademark, body corporate, LLP, or partnership company that already exists will the registrar allow it. It will be possible to correct the errors by resubmitting the form within 15 days. There is a clause allowing for two possible LLP names. After the MCA approves your name, you have three months to apply for LLP incorporation.

3.Limited liability partnership compliance incorporation

i) To register a Limited Liability Partnership, you’ll need to file the FiLLiP form with the Registrar responsible for the state where the LLP is being set up LLP’s registered office is located. An integrated form will be used.
ii) The fees listed in Annexure “A” must be paid.
iii) If a person who is to be appointed as a designated partner does not have a DPIN or DIN, this form also allows them to apply for DPIN allocation.
iv) A maximum of two individuals are allowed to apply for the allocation as part of the submission process.
v) It is also possible to apply for a name reservation via FiLLiP.
vi) The approved and reserved name will be used as the proposed name of the LLP if the applied name is accepted.
vii) The Limited Liability Partnership compliance (LLP) agreement regulates the rights and responsibilities that are shared by the partners as well as between the LLP and its partners.
viii) The LLP agreement needs to be submitted online using Form 3 on the MCA Portal.
ix) Form 3, which outlines the LLC agreement, needs to be submitted within 30 days from the date the LLC is officially formed.
x) The LLP Agreement needs to be prepared on stamp paper to make it legally valid and binding. The stamp duty charges can differ based on the state where the LLP is being registered, as each state has its own fee structure

FAQ

1. What is an Limited liability partnership compliance?

An LLP, or limited liability partnership, combines the best of both worlds – it offers the legal protections of limited liability like a company, while maintaining the operational flexibility of a traditional partnership.

2. What are the unique benefits that set a Limited Liability Partnership compliance (LLP) apart from other business structures?

i) Limited Liability: The amount of a partner’s liability is capped at what they contributed to the LLP.
ii) Independent Legal Entity: LLP is regarded as an independent legal entity that exists independently of its partners.
iii)Absence of a Minimum Capital Need: To establish an LLP, there is no minimum capital needed.
iv) Perpetual Succession: LLP continues to exist regardless of partner changes.

3. What is the process for registering an LLP under the LLP Act, 2008?

Step 1: Acquire a certificate of digital signature (DSC). A DSC is required for each designated partner to sign electronic documents.
Step 2: is to acquire the Director Identification Number (DIN).A DIN application must be submitted by each designated partner via the Ministry of Corporate Affairs (MCA) website.
Step 3: Reservation of Names, Apply for the LLP’s reservation using Form RUN-LLP after deciding on a name for it.
Step 4: The LLP Agreement is filed: Create a limited liability partnership agreement that outlines each partner’s responsibilities and rights, then submit it to the Registrar of Companies (RoC).
Step 5: Documentation for Incorporation: Together with the required paperwork for registration, submit the incorporation forms (Form FiLLiP) to the MCA portal.
After the application is approved, a registration certificate is issued confirming the registration of the LLC.

4. What documents are required for LLP registration?

i) PAN, Aadhaar, passport, voter ID, and other documents attesting to the partners’ identities and addresses.
ii) Utility bills, rental agreements, and other documents attesting to the LLP’s registered office address.
iii) LLP Agreement: Outlines partners’ responsibilities and rights.

5. How many partners do you need at minimum to form an LLP?

To set up an LLP, you’ll need at least two partners—these can be individuals or corporate entities. The maximum number of partners is unlimited.

6. What are the compliance requirements for an LLP after registration?

i) Annual Return Submission: Within 60 days of the fiscal year’s conclusion, limited liability partnerships (LLPs) must submit an annual return in Form 11 to the Registrar of Companies (RoC).
ii) The LLP must submit Form 8, which covers its Statement of Accounts and Solvency, within 30 days after the close of the first half of the financial year half of the financial year.
iii) Maintain Books of Accounts: The LLP is required to keep accurate books of accounts, which include balance sheets and income statements.
iv) LLPs are required to file an annual income tax return (ITR-5) and make tax payments in accordance with the applicable income tax regulations.
v) Changes to the Partnership: The RoC must be informed of any modifications to the partners or designated partners.

7. What is the LLP Agreement?

A legal agreement known as the LLP Agreement outlines the partners’ obligations, rights, and functions. It regulates the LLP’s activities, profit-sharing, and dispute settlement. The filing needs to be completed with the Registrar within 30 days from the date the LLP is formally incorporated.

8. What is the capital requirement for an LLP?

The LLP Act of 2008 does not impose a minimum capital requirement on an LLP. Partners may make contributions in accordance with their mutual understanding.

9. Can an LLP be converted into a private limited company under current regulations?

Yes, by following the procedures outlined in the Companies Act of 2013, an LLP can be changed into a private limited company. Members’ consent is needed for this, as is submission of the necessary paperwork to the RoC.

10. What is the penalty for non-compliance under the LLP Act?

Failure to file yearly returns or other documents may result in the following penalties for noncompliance with the LLP Act’s filing obligations.
i) Delays in filing are subject to late fees.
ii) Prosecution for severe non-compliance, which in certain circumstances may result in fines or even incarceration.

11. How is the liability of the partners of an LLP determined?

In an LLP, every partner is only responsible for the amount they’ve invested—nothing more, even if the business faces losses or debts. Unlike in a traditional partnership, they are not held personally responsible for the LLP’s debts.

12. What are the consequences if an LLP doesn’t meet its responsibilities under the LLP Act?

An LLP may be subject to fines and, in certain situations, have its name removed from the register by the RoC if it does not fulfil its compliance requirements. In this situation, the LLP might be dissolved, and if it isn’t, the partners will be held individually responsible for any debts.

LLP Compliance ensures your business runs smoothly while protecting partners and maintaining legal standing.
Whether you’re a startup or a growing firm, staying compliant helps you:

✅ Meet ROC, income tax, and GST filing obligations
✅ Avoid penalties, disqualifications, and legal action
✅ Maintain limited liability protection for all partners
✅ Build trust with clients, banks, and stakeholders
✅ Stay eligible for funding, registrations, and tenders

Click here to discover how we make Limited liability partnership Compliance easy, organized, and fully managed.