Company Law,Limited Liability Partnership
Annual Compliances for Private Limited Company and LLP
12 Oct 2016  |  Views: 128  | 
Legistify
Advocate

As a Startup there is a thing that keeps giving me food for thought as to which business entity to form and what is the compliance cost of these entities. Hence, there is a need to reflect upon it and this brings me to write on the Annual legal compliance for a Company and LLP.
Running a company doesn’t seem to be an easy task at least not for the faint of heart. Besides all the business stress, financial pressure, customer’s demands, salaries expectations from employees are enough reasons to make anyone snap. But even all of this is perhaps not so much of a headache for entrepreneurs as the massive legal and regulatory requirements the Government expects you to fullfill as a Private Limited Company.

Annual Compliance for Private Limited Company
Every Pvt Ltd shall comply with Annual Requirements of ROC and Income Tax and shall file
• Income Tax Return every year before 30th Sep
• File Form MGT-7: Statement of Disclosure of ShareHolders and Directors - within 60 days from date of Annual General Meeting (AGM)
• File Form AOC-4: Annual Return of Companies before 30th September every year.

Following documents are required for Audit, ITR filing and ROC filling of your Company-
1. Bank Statements of all accounts in the name of Company and Individual.
2. Sales Tax/Service/TDS Tax returns if any
3. Invoices of all purchases and sales.
4. Invoices of all types of expenses.

Procedure For Annual Compliance fulfilment
• Maintain Proper Books of Accounts.
• Prepare and File Balance Sheet
• Get your accounts Audited by Chartered Accountant
• File Form ADT-1, MGT-7 and Form AOC-4 with ROC
• File Income Tax Returns with Income Tax Department

Need for Annual Compliance
• Late filing or non-filing of Annual Return before the due date will attract a penalty 12 Times of Normal Fees.
• Further, the Company cannot be wound-up or closed without filing of the return.
• Therefore, it is best to file the Annual Return within the due dates.

Private Ltd Company and OPC (One Person Company) are governed by The Companies Act, 2013 and the corresponding company rules. There are various norms as mentioned above right from the preparation of accounts books to preparation of financial statements and getting most of important events approved by way of conducting board and general meetings with corresponding ROC (Registrar of Companies) filings.

Similarly, in LLP, immediately after incorporation, should comply with the statutory requirements of the Limited Liability Partnership Act, 2008 and the corresponding LLP Rules. It becomes essential to take note of all the key compliance so that you, as an entrepreneur, are aware of the entire regulatory framework of your business and seep through the difference in these entities to take an informed decision.

Annual Compliance for LLP
All the Limited Liability Partnership registered under the LLP Act, 2008 are required to file the following returns mandatorily whether the LLP do business or not.

A. Filing with Registrar of LLP
1. Filing of Annual Return
An LLP is required to file the Annual Return with the Registrar of LLP (Form 11) within 60 days of closure of its financial year. An LLP have to close its financial year on every 31st March. So, the Annual Return is to be filed on or before 30th May every year.
2. Filing of Annual Accounts
Every LLP have to maintain books of accounts as per double entry system of accounting and prepare a Statement of Accounts and Solvency (Accounts) every year ending on 31st March. LLP have to file such Accounts to the Registrar of LLP (Form 8) within 30 days from the end of 6 months of such financial year. So, the filing of Accounts is to be filed on or before 30th October every year.

In case of an LLP whose annual turnover exceeds Rs.40 lakhs or whose contribution exceeds Rs.25 lakhs, shall be required to get its accounts audited by a CA.

B. INCOME TAX
As per Income Tax Act, LLP have to close its financial year as on 31st March every year and have to file the returns with Income Tax Department. In case of LLP whose annual turnover is more than Rs.100 Lakhs, the accounts have to be audited as required under Income Tax Act as well.

LLP have to file its Income Tax Returns on or before the due dates as follows:
LLP whose accounts are not required to be audited under any Law-31st July of every year
LLP whose accounts are subject to Audit under any Law-30th September of every year 

Procedure for Annual Compliance fulfilment
• Maintain Proper Books of Accounts.
• Prepare and File Balance Sheet
• If your turnover is More than 40 Lakhs, get your accounts certified by CA
• File Form 8 and Form 11 with ROC
• File Income Tax Returns with Income Tax Department

NEED FOR ANNUAL COMPLAINCE
• Late filing or non-filing of LLP Annual Return or Statement of Accounts and Solvency before the due date will attract a penalty of Rs.100 for each day of default.
• Further, the LLP cannot be wound-up or closed without filing of the return and the penalty doesn't have a ceiling.
• Therefore, it is best to file the Annual Return and Statement of Accounts & Solvency of a LLP in time to avoid heavy penalty.

There is nothing better than a Private Company from an Investor’s perspective and credibility; however, the cost of compliance is definitely higher. If you want to take it slow and steady and raising funds is not on cards, hitch to the easiest and simplest option of an LLP.


Give us all your Compliance headache, we will get your Annual Compliances done. Click the link
https://www.legistify.com/services
 

Upvotes: 0  |  Downvotes: 0  | 

Comments:


Login to comment