LLP Annual Compliance | IT ROC & Tax Audit Filing Service Plan Pricing

A Limited Liability Partnership ( LLP ), is a legal entity in India to conduct business. An LLP operates like any limited partnership, but in an LLP, each member is protected from personal liability, except to the extent of their capital contribution in the LLP.

LLP has a minimum of two Partners (aka Directors) and have no restriction on maximum number of such partners. Tax audit is optional for LLPs up to a certain limit. The name of such a company ends with the words 'LLP'.

All designated partners of a proposed LLP shall obtain a "Designated Partner Identification Number" (aka DPIN). You need to file eForm DIR-3 in order to obtain DIN or DPIN. In case you already have a DIN (Director Identification Number), the same can be used as a DPIN. DIN and DPIN are used interchangeably.

LLP Agreement is an agreement among the partners of the LLP with which the business can operate. Contains byelaws, rules based with which important matters like main business of the LLP, Capital, profit sharing, meeting schedules are to be decided. It is also a standard legal document prepared by the tax consultant, company secretaries during registration of LLP.

Once prepared, LLP agreement should be filed / uploaded within 30 days (using Form-3). This is one time effort and is not required to be touched at the time of Annual Compliance.

Companies incorporated under the Companies Act, 1956 are required to e-file the Registrar of Companies (RoC)

ROC States that:

1. Address of members of company & Details of directors.
2. Statement containing particulars of total amount of indebtedness of the company.
3. Name of member and respective dates on which they become member and ceased to be member as on date of Annual General meeting.

Every company having a share capital shall, within 60 days from the date of each Annual General Meeting file annual return with the Registrar of Companies (RoC) under e-form 20B.

Every company not having share capital shall, within 60 days from the day on which Annual General Meeting is held, prepare and file with the Registrar a return under e-Form 21A.

Below documents needs to be e-filed with ROC:

Private limited company should be considered for business raising funds, requires greater compliance, with few of tax advantages. In case LLP it is for balanced compliance and solid limited liability measures with fewer compliance and tax advantages. And in case of OPC it is for sole entrepreneur who requires the higher compliance with minimal tax advantages and start-up costs.

Among three of them, LLP wins for majority of the businesses as it is just right.

Those differentiations are important for the business in India. As they all are somehow interlinked with each other, but the difference among them can be made upon the various features. Initially, the private limited company and OPC are governed by Companies Act 2013 but LLP is governed by Limited Liability Act 2008. They all are the separate legal entity, but their capital contribution are slightly different. Starting from 2019, Govt of India decided to remove the minimum capital contribution limit when incorporating the company. This applies to OPC & LLP as well, though it was different earlier.

The number of Directors among private limited company is a minimum of 2 Directors, one has to be resident, in case of LLP, they also have a minimum of 2 designated partners, one has to be resident. But in case of OPC, there is only 1 resident director.

When it comes to tax audit among all these, it is compulsory in private limited company and OPC, but in case of LLP, no annual audit if turnover is less than 40 lakhs and the capital contribution is less than 25 lakhs. But they all have the limited liability.

With regard to conversion,

• private limited company can be converted into public liability company and LLP
• but LLP can not be converted into OPC, and private limited company
• OPC can be converted into public liability company and private limited company

Another differentiation among all those is with the foreign ownership. In private limited company it is allowed but in LLP ownership can be allowed but with due permission from reserve bank of India and foreign investment department and similarly in OPC too.

Now another concept is with the taxation, in private limited company, LLP and OPC the tax rate is 30% on profit plus cess and surcharge. And with the annual filing in private limited company and LLP income tax return and annual statement of accounts and return is required to be filled with registrar of the company. In OPC one person is required to file its income tax return and annual statements of accounts with the registrar.

The Companies Act states that every company shall hold an annual general meeting in each financial year and the gap between two AGMs shall not be more than 15 months and financial Statement shall lay in AGMs of that financial year.

A copy of financial statement including consolidated financial statement if any, which has been adopted at AGMs shall be filed with ROC in e-form AOC-4 within 30 days of date of AGMs.

Further every Company will file its Annual Return i.e. e-form MGT-7 within 60 days of holding of Annual General Meeting or if AGM is not held for any reason then form must be filed along with reason for not holding it.

Annual Return will be for the period 1st April to 31st March. Every Listed Companies or a company having paid up Share capital of minimum Rs.10 crore or turnover of minimum Rs. 50 crore shall be certified by Practicing Company Secretary, and the certificate shall be in form MGT-8. MGT-8 is required to be attached in MGT-7

Statutory Auditor as per Law, Company has to appoint its first auditor within 30 days from the date of incorporation. If board of directors are not able to appoint then it has to be appointed within 90 days Tax Auditor as per the Income-tax Act 1961, it is obligatory of the following persons (carrying on business or profession) to get his accounts audited before the Oct 30th * (date varies from year to year) by a Chartered Accountant ( CA ) or a Cost Management Accountant ( CMA ).

If the company fails to file annual return with the Registrar of Companies (RoC) within specified time (i.e. within 60 days from the date of Annual General Meeting) the company shall be liable to pay additional fees till the default continues.

Penalty for filing e-form 20B after due date:Normal fee: