Statutory Compliance immediately after LLP Registration

Introduction

Obtaining a Limited Liability Partnership Registration Certificate is an exciting moment in your business start-up journey. You may have gone through the process of assembling required documentation as specified by Ministry of Corporate Affairs standards and also advised by practitioners who have assisted with certifications for your LLP registration.

Obtaining a Certificate of Incorporation is just a starting point for a set of compliances that an LLP must meet from time to time under different laws in India.

Immediate Steps after LLP Incorporation

LLP Agreement

Immediately upon incorporation of the LLP, Limited Liability Partners are expected to execute an LLP Agreement and a copy must be filed with the LLP Form 3 Registrar of Companies within 30 days of incorporation of LLP. LLP Agreement must be signed as per the respective state’s Stamp Act where the LLP is registered.

The delay in filing the LLP agreement would incur a penalty of Rs.100.00 every day until the ROC fling Form 3 deadline.

• Application for Permanent Account Number (PAN)

LLP must obtain a Permanent Account Number (PAN) from the Indian Government’s tax department. PAN is an identification number for every income tax payer. To receive a PAN, the LLP must apply with a copy of its Incorporation Certificate.

• Application for Tax Deduction and Collection Account Number (TAN)

Each LLP must also obtain a Tax Deduction and Collection Account Number (TAN) from the Indian Government’s tax department. Some types of payments include Source Tax Deduction (TDS), and the tax so deducted must be transferred to the government.

• Opening Bank Account in LLP Name

It is mandatory to open a Current Account (any bank in India) on behalf of an LLP after its incorporation.

The following are documents and information are required for opening a Current Account:

• Copies of LLP Documents – Form FiLLiP and Form 3 filed with ROC and LLP Agreement.
• LLP Permanent Account Number(PAN).
• Partner settlement Opening and running bank account.
• KYC info for LLP’s Approved Partners.
• Initial deposit verification to Open Bank Account (This deposit can be viewed as a capital infusion by partners).

Statement of Accounts and Solvency

Growing LLP must prepare and maintain account books on an accrual basis in the double-entry accounting system. The LLP must maintain account books with all expenses payments and comply with legal provisions under the Companies Act and other different laws.

Each year ending 31 March. To this end, each year, LLP Form 8 should be filed with the Company Registrar on or before 30 October.

Forms 8 or Annual Statements refer to LLPs registered before September 30, 2017. For LLPs registered after October 1, 2017, annual statements may be submitted in 2019. (Dates only for example)

Filing LLP Annual Return

Annual Return or Form 11 is an overview of LLP Partners. It’s also an example of how management improves. Each LLP must send annual returns for LLP to the Registrar in Form 11 within 60 days of a financial year’s closure. That is, annual return must be filed on or before May 30 per year.

Form 11 or Annual Return applies to LLPs reported until September 30, 2017. For LLPs registered after October 1, 2017, return can be filed in 2019.(We have mentioned dates for example)

Appointment of Auditors

Any LLP whose capital investment exceeds Rs.25 lakhs or annual revenue exceeds Rs.40 lakhs must be audited by a Chartered Accountant in practice. There is no need to audit other LLPs.

Conclusion

Around this point of starting your business, please bear in mind the popular legal maxim Ignorantia juris non excusat, meaning “ignorance of law is not an excuse”. It is a legal principle that a person who is unaware of a law can not avoid responsibility for violating the law merely because one was unaware of its substance.